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What changed in Paccar's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Paccar's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+202 added−207 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-21)

Top changes in Paccar's 2024 10-K

202 paragraphs added · 207 removed · 172 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

51 edited+5 added−6 removed52 unchanged
Biggest changeThe Company continually monitors developments in emissions and climate change-related laws and regulations in the markets in which the Company conducts business. The Company will continue to fund capital and R&D projects to meet future emissions and certification requirements through the introduction of new technologies into our products, engines and exhaust after-treatment systems.
Biggest changeThe Company will continue to fund capital and R&D projects to meet future emissions and certification requirements through the introduction of new technologies into our products, engines and exhaust after-treatment systems. The Company’s manufacturing and assembly plants are subject to environmental laws and regulations such as regulating air emissions, water discharges and the handling and disposal of hazardous substances.
The Kenworth nameplate is also marketed and distributed by foreign subsidiaries in Mexico and Australia. The DAF nameplate is marketed and distributed worldwide by a foreign subsidiary headquartered in the Netherlands and is also marketed and distributed by foreign subsidiaries in Brasil and Australia.
The Kenworth nameplate is also marketed and distributed by foreign subsidiaries in Mexico and Australia. The DAF nameplate is marketed and distributed worldwide by a foreign subsidiary headquartered in the Netherlands and is also marketed and distributed by foreign subsidiaries in Brasil, Australia and Mexico.
Payment is required on dealer inventory financing when the floored truck is sold to a customer or upon maturity of the flooring loan, whichever comes first. Dealer inventory loans generally mature within one year. The Company funds its financial services activities primarily from collections on existing finance receivables and borrowings in the capital markets.
Payment is required on dealer inventory financing when the floored truck is sold to a customer or upon maturity of the flooring loan, whichever comes first. Dealer inventory loans generally mature within one year. 5 The Company funds its financial services activities primarily from collections on existing finance receivables and borrowings in the capital markets.
Rich (55) Senior Vice President and Chief Technology Officer since January 2024; Vice President and Chief Technology Officer from March 2021 to December 2023; Prior to that, he worked for 30 years at Ford Motor Company in positions of increasing responsibility including Director of Autonomous Vehicles and Technology; Chief Operating Officer of AV LLC and Executive Director of Global Strategy.
Rich (56) Senior Vice President and Chief Technology Officer since January 2024; Vice President and Chief Technology Officer from March 2021 to December 2023; Prior to that, he worked for 30 years at Ford Motor Company in positions of increasing responsibility including Director of Autonomous Vehicles and Technology; Chief Operating Officer of AV LLC and Executive Director of Global Strategy.
Aftermarket truck parts are sold and delivered to the Company’s independent dealers through the Company’s 18 strategically located parts distribution centers (PDCs) in the U.S., Canada, Europe, Australia, Mexico and Central and South America. Parts are primarily purchased from various suppliers and also manufactured by the Company.
Aftermarket truck parts are sold and delivered to the Company’s independent dealers through the Company’s 20 strategically located parts distribution centers (PDCs) in the U.S., Canada, Europe, Australia, Mexico and Central and South America. Parts are primarily purchased from various suppliers and also manufactured by the Company.
PFS generally requires a down payment and secures its interest in the underlying truck collateral and may require other collateral or guarantees. In the event of default, PFS will repossess the truck and sell it in the open market primarily through its dealer network as well as PFS used truck centers.
PFS generally requires a down payment and secures its interest in the underlying truck collateral and may require other collateral or guarantees. In the event of default, PFS will repossess the truck and sell it in the open market primarily through its dealer network or PFS used truck centers.
The amount of credit losses depends on the rate of default on loans and finance leases and, in the event of repossession, the ability to recover the amount owed from sale of the collateral which is affected by used truck prices.
The amount of credit losses depends on the rate of default on loans and finance leases and, in the event of repossession, the ability to recover the amount owed from sale of the collateral which is affected by used truck prices and other factors.
Commercial truck manufacturing comprises the largest segment of PACCAR’s business and accounted for 77% of total 2023 net sales and revenues. Substantially all trucks are sold to independent dealers. The Kenworth and Peterbilt nameplates are marketed and distributed by separate divisions in the U.S. and a foreign subsidiary in Canada.
Commercial truck manufacturing comprises the largest segment of PACCAR’s business and accounted for 74% of total 2024 net sales and revenues. Substantially all trucks are sold to independent dealers. The Kenworth and Peterbilt nameplates are marketed and distributed by separate divisions in the U.S. and a foreign subsidiary in Canada.
The Company also manufactures engines at its Columbus, Mississippi facility. In 2023, the Company installed PACCAR engines in approximately 37% of the Company’s Kenworth and Peterbilt heavy‑duty trucks in the U.S. and Canada and substantially all of the DAF heavy-duty trucks sold throughout the world. Engines not manufactured by the Company are purchased from Cummins Inc. (Cummins).
The Company also manufactures engines at its Columbus, Mississippi facility. In 2024, the Company installed PACCAR engines in approximately 33% of the Company’s Kenworth and Peterbilt heavy‑duty trucks in the U.S. and Canada and substantially all of the DAF heavy-duty trucks sold throughout the world. Engines not manufactured by the Company are purchased from Cummins Inc. (Cummins).
Aftermarket parts inventory levels are determined largely by anticipated customer demand and the need for timely delivery. The Parts segment accounted for 18% of total 2023 net sales and revenues. Key factors affecting Parts segment earnings include the aftermarket parts sold in the markets served and the margins realized on the sales.
Aftermarket parts inventory levels are determined largely by anticipated customer demand and the need for timely delivery. The Parts segment accounted for 20% of total 2024 net sales and revenues. Key factors affecting Parts segment earnings include the aftermarket parts sold in the markets served and the margins realized on the sales.
Walenczak (49) Vice President of PACCAR and General Manager of Kenworth since January 2024; Assistant General Manager – Sales and Marketing, Kenworth from August 2021 to December 2023; Assistant General Manager – Operations, PACCAR Parts from February 2019 to August 2021. Michael K.
Walenczak (50) Vice President of PACCAR and General Manager of Kenworth since January 2024; Assistant General Manager – Sales and Marketing, Kenworth from August 2021 to December 2023; Assistant General Manager – Operations, PACCAR Parts from February 2019 to July 2021. Michael K.
Officers are appointed by the Board of Directors annually but may be appointed or removed on interim dates. 9
Officers are appointed by the Board of Directors annually but may be appointed or removed on interim dates. 10
Sales of trucks manufactured with these cabs amounted to approximately 3% of consolidated revenues in 2023. A short-term loss of supply, and the resulting interruption in the production of these trucks, would not have a material effect on the Company’s results of operations.
Sales of trucks manufactured with these cabs amounted to approximately 2% of consolidated revenues in 2024. A short-term loss of supply, and the resulting interruption in the production of these trucks, would not have a material effect on the Company’s results of operations.
Walton (59) Vice President and General Counsel since August 2020; Senior Counsel from August 2007 to July 2020. Harry M.B. Wolters (53) Vice President of PACCAR and General Manager Global Powertrain & Electrification since August 2022; Vice President of PACCAR and President of DAF Trucks N.V. from September 2018 to July 2022.
Walton (60) Vice President and General Counsel since August 2020; Senior Counsel from August 2007 to July 2020. Harry M.B. Wolters (54) Vice President of PACCAR and General Manager Global Powertrain & Electrification since August 2022; Vice President of PACCAR and President of DAF Trucks N.V. from September 2018 to July 2022.
PFS’s retail loan and lease customers consist of small, medium and large commercial trucking companies, independent owner/operators and other businesses and acquire their PACCAR trucks principally from independent PACCAR dealers. PFS accounted for 5% of total net sales and revenues and 51% of total assets in 2023. PFS is primarily responsible for managing the sales of the Company’s used trucks.
PFS’s retail loan and lease customers consist of small, medium and large commercial trucking companies, independent owner/operators and other businesses and acquire their PACCAR trucks principally from independent PACCAR dealers. PFS accounted for 6% of total net sales and revenues and 52% of total assets in 2024. PFS is primarily responsible for managing the sales of the Company’s used trucks.
In addition, the Company’s reports filed with the SEC can be found at www.sec.gov . 8 INFORMATION ABOUT THE COMPANY’S EXECUTIVE OFFICERS Item 401(b) of Regulation S-K: Information about the Company’s Executive Officers as of February 21, 2024 is as follows: Name and Age Present Position and Other Position(s) Held During Last Five Years Mark C.
In addition, the Company’s reports filed with the SEC can be found at www.sec.gov . 9 INFORMATION ABOUT THE COMPANY’S EXECUTIVE OFFICERS Item 401(b) of Regulation S-K: Information about the Company’s Executive Officers as of February 19, 2025 is as follows: Name and Age Present Position and Other Position(s) Held During Last Five Years Mark C.
PFS’s experience over the last sixty years financing truck sales has been that periods of economic weakness result in higher past dues and increased rates of repossession. Used truck prices also tend to fall during periods of economic weakness. As a result, credit losses tend to increase during periods of economic weakness.
For over sixty years, PFS’s experience has been that periods of economic weakness result in higher past dues and increased rates of repossession. Used truck prices also tend to fall during periods of economic weakness. As a result, credit losses tend to increase during periods of economic weakness.
Environmental Protection Agency (EPA), the European Union, U.S. state regulatory agencies (such as the California Air Resources Board), regulatory agencies in other international markets where the Company operates, and non-binding international accords related to climate change.
Environmental Protection Agency (EPA), the European Union, U.S. state regulatory agencies (such as the California Air Resources Board), regulatory agencies in other international markets where the Company operates, and international accords related to climate change including the Paris Agreement.
OTHER DISCLOSURES The Company’s filings on Forms 10‑K, 10‑Q and 8‑K and any amendments to those reports can be found on the Company’s website www.paccar.com free of charge as soon as practicable after the report is electronically filed with, or furnished to, the Securities and Exchange Commission (SEC).
The factory is expected to start production in the next few years. OTHER DISCLOSURES The Company’s filings on Forms 10‑K, 10‑Q and 8‑K and any amendments to those reports can be found on the Company’s website www.paccar.com free of charge as soon as practicable after the report is electronically filed with, or furnished to, the Securities and Exchange Commission (SEC).
(2) The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles. (3) The Financial Services segment includes finance and leasing products and services provided to customers and dealers. PACCAR’s finance and leasing activities are principally related to PACCAR products and associated equipment. PACCAR’s Other business includes the manufacturing and marketing of industrial winches.
(2) The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles. (3) The Financial Services segment includes finance and leasing products and services provided to customers and dealers. PACCAR’s finance and leasing activities are principally related to PACCAR products and associated equipment.
In Europe, there are six principal competitors in the commercial truck market, including parent companies to the four competitors of the Company in the U.S. In 2023, DAF had a 15.6% share of the European heavy-duty market and a 9.1% share of the light/medium-duty market. These markets are highly competitive in price, quality and service.
In Europe, there are six principal competitors in the commercial truck market, including parent companies to the four competitors of the Company in the U.S. In 2024, DAF had a 14.4% share of the European heavy-duty market and a 9.5% share of the light/medium-duty market. These markets are highly competitive in price, quality and service.
HUMAN CAPITAL MANAGEMENT PACCAR is committed to a strong, diverse and inclusive culture and the Company’s excellent financial results reflect its human centered philosophy. The Company provides its employees with robust benefit packages, comprehensive training programs, tuition assistance and a work environment that promotes safety and diversity. The Company’s benefit packages support employee physical, emotional and financial well-being.
HUMAN CAPITAL MANAGEMENT PACCAR is committed to a strong, inclusive and collaborative culture and the Company’s excellent financial results reflect its outstanding workforce. The Company provides its employees with robust benefit packages, comprehensive training programs, tuition assistance and a work environment that promotes safety, respect and belonging. The Company’s benefit packages support employee physical, emotional and financial well-being.
TRUCKS PACCAR’s trucks are marketed under the Kenworth, Peterbilt and DAF nameplates. These trucks, which are built in three plants in the United States, three in Europe and one each in Australia, Brasil, Canada and Mexico, are used worldwide for over-the-road and off-highway hauling of commercial and consumer goods.
These trucks, which are built in three plants in the United States, three in Europe and one each in Australia, Brasil, Canada and Mexico, are used worldwide for over-the-road and off-highway hauling of commercial and consumer goods.
PACCAR’s consistent focus on workplace safety has resulted in a recordable injury rate lower than the U.S. industry average. On December 31, 2023, the Company had approximately 32,400 employees. Approximately 39% are U.S. employees. ENVIRONMENTAL AND SUSTAINABILITY LEADERSHIP Reducing the environmental impact of the Company’s activities and products is an integral part of the Company’s process of continuous improvement.
PACCAR’s consistent focus on workplace safety has resulted in a recordable injury rate lower than the U.S. industry average. On December 31, 2024, the Company had approximately 30,100 employees. Approximately 38% were U.S. employees. 7 ENVIRONMENTAL AND SUSTAINABILITY LEADERSHIP Reducing the environmental impact of the Company’s activities and products is an integral part of the Company’s process of continuous improvement.
PFS matches the maturity and interest rate characteristics of its debt with the maturity and interest rate characteristics of loans and leases. 5 Key factors affecting the earnings of the Financial Services segment include the volume of new loans and leases, the yield earned on the loans and leases, the costs of funding investments in loans and leases, the ability to collect the amounts owed to PFS, the volume of used truck sales and used truck prices.
Key factors affecting the earnings of the Financial Services segment include the volume of new loans and leases, the yield earned on the loans and leases, the costs of funding investments in loans and leases, the ability to collect the amounts owed to PFS, the volume of used truck sales and used truck prices.
Advanced Vehicles - PACCAR began work on its SuperTruck 3 program to continue the development of its Class 8 Kenworth and Peterbilt battery-electric and fuel cell vehicles, along with its vehicle charging stations. SuperTruck 3 is a U.S. Department of Energy (DOE) initiative to develop state-of-the-art zero emissions medium- and heavy-duty trucks.
Advanced Vehicles - PACCAR continued its SuperTruck 3 program to develop and deploy next generation Class 8 Kenworth and Peterbilt battery-electric vehicles, along with its vehicle charging infrastructure. SuperTruck 3 is a U.S. Department of Energy (DOE) initiative to develop state-of-the-art zero emissions medium- and heavy-duty trucks.
PACCAR’s MX-13 and MX-11 engines are certified to use B10/B20/B30 and XTL biofuels in Europe and B20 biofuel in the U.S. Engines used in PACCAR trucks not manufactured by the Company are certified to use up to B20 biofuels.
Low Carbon and Renewable Fuels – All truck sales and diesel engine unit sales are certified to use biofuels. PACCAR’s MX-13 and MX-11 engines are certified to use B10/B20/B30 and XTL biofuels in Europe and B20 biofuel in the U.S. Engines used in PACCAR trucks not manufactured by the Company are certified to use up to B20 biofuels.
There are four principal competitors in the U.S. and Canada commercial truck market. The Company’s share of the U.S. and Canadian Class 8 market was 29.5% of retail sales in 2023, and the Company’s medium-duty market share was 14.5%.
There are four principal competitors in the U.S. and Canada commercial truck market. The Company’s share of the U.S. and Canadian Class 8 market was 30.7% of retail sales in 2024, and the Company’s medium-duty market share was 18.0%.
REGULATION As a manufacturer of highway trucks, the Company is subject to the National Traffic and Motor Vehicle Safety Act and Federal Motor Vehicle Safety Standards promulgated by the National Highway Traffic Safety Administration as well as environmental laws and regulations in the United States, and is subject to similar regulations in all countries where it has operations and where its trucks are 6 distributed.
Although these patents are considered important to the overall conduct of the Company’s business, no patent or group of patents is considered essential to a material part of the Company’s business. 6 REGULATION As a manufacturer of highway trucks, the Company is subject to the National Traffic and Motor Vehicle Safety Act and Federal Motor Vehicle Safety Standards promulgated by the National Highway Traffic Safety Administration as well as environmental laws and regulations in the United States, and is subject to similar regulations in all countries where it has operations and where its trucks are distributed.
Pigott (70) Executive Chairman of the Board of Directors since April 2014; Chairman and Chief Executive Officer from 1997 to April 2014. Mr. Pigott is the brother of John M. Pigott, a director of the Company. R. Preston Feight (56) Chief Executive Officer since July 2019; Executive Vice President from September 2018 to June 2019. Harrie C.A.M.
Pigott (71) Executive Chairman of the Board of Directors since April 2014; Chairman and Chief Executive Officer from 1997 to April 2014. Mr. Pigott is the brother of John M. Pigott, a director of the Company. R. Preston Feight (57) Chief Executive Officer since July 2019. Harrie C.A.M. Schippers (62) President and Chief Financial Officer since January 2018. Kevin D.
The Company engages in a continuous program of trademark and trade name protection in all marketing areas of the world. The Company’s truck products are subject to noise, emission and safety regulations. Competing manufacturers are subject to the same regulations.
The Company engages in a continuous program of trademark and trade name protection in all marketing areas of the world. 4 The Company’s truck products are subject to noise, emission and safety regulations. Competing manufacturers are subject to the same regulations. The Company believes the cost of complying with these regulations will not be detrimental to its business.
Bolgar (55) Vice President and Chief Human Resources Officer since June 2022; Served as Human Resources Vice President of Americas and Global Business Units and Global R&D for Baxter International, Inc. from January 2020 to May 2022; Human Resources Vice President of Global Operations and Quality for Baxter International, Inc. from April 2016 to December 2019. Todd R.
Paulo H. Bolgar (56) Vice President and Chief Human Resources Officer since June 2022; Served as Human Resources Vice President of Americas and Global Business Units and Global R&D for Baxter International, Inc. from January 2020 to May 2022. Craig R.
The Company believes in all material respects it is in compliance with the laws and regulations applicable to our plants and operations.
Failure to comply with these regulations could lead to fines and other penalties. The Company believes in all material respects it is in compliance with the laws and regulations applicable to our plants and operations.
Remanufacturing - Remanufacturing is the industrial process of returning a previously used component to “like-new” condition. Remanufacturing helps the environment by reducing waste. PACCAR’s aftermarket parts division sells remanufactured engines and many other remanufactured components. PACCAR announced in December 2023 that it will construct a new engine remanufacturing facility in Columbus, Mississippi to be opened in 2025.
Remanufacturing - Remanufacturing is the industrial process of returning a previously used component to “like-new” condition. Remanufacturing helps the environment by reducing waste. PACCAR’s aftermarket parts division sells remanufactured engines and many other remanufactured components. PACCAR is investing in additional global engine manufacturing capacity, and in the construction of a new engine remanufacturing facility in Columbus, Mississippi.
Laura J. Bloch (47) Vice President of PACCAR and General Manager of PACCAR Parts since March 2022; Senior Assistant General Manager of Sales and Marketing, PACCAR Parts from August 2021 to February 2022; Assistant General Manager of Sales and Marketing, Kenworth from February 2019 to July 2021. Paulo H.
Bloch (48) Senior Vice President since January 2025; Vice President of PACCAR and General Manager of PACCAR Parts from March 2022 to December 2024; Senior Assistant General Manager of Sales and Marketing, PACCAR Parts from August 2021 to February 2022; Assistant General Manager of Sales and Marketing, Kenworth from February 2019 to July 2021. John N.
PACCAR’s commitment to the environment is demonstrated in the Company’s energy efficient operations and technologically advanced products. The Company’s environmental management system and policy are designed to focus on the reduction of the environmental impacts of the Company’s activities, products and services. 7 PACCAR has disclosed greenhouse gas emissions through CDP (formerly Carbon Disclosure Project) since 2014.
PACCAR’s commitment to the environment is demonstrated in the Company’s energy efficient operations and technologically advanced products. The Company’s environmental management system and policy are designed to focus on the reduction of the environmental impacts of the Company’s activities, products and services.
PACCAR is continuously looking for ways to reduce waste, reuse materials, conserve energy in its facilities and reduce the environmental impact of our activities. PACCAR’s factories are ISO 14001 certified and more than 80% are zero waste-to-landfill. Innovative Products - A key element of PACCAR’s environmental strategy is to offer our customers commercial vehicles that reduce environmental impacts.
Operations - PACCAR is committed to environmental responsibility in the vehicle production process. PACCAR is continuously looking for ways to reduce waste, reuse materials, conserve energy in its facilities and reduce the environmental impact of our activities. PACCAR’s factories are ISO 14001 certified and more than 80% are zero waste-to-landfill.
The value of finished truck components manufactured by independent suppliers ranges from approximately 24% in Europe to approximately 87% in North America. In addition to materials, the Company’s cost of sales includes labor and factory overhead, vehicle delivery and warranty.
The value of finished truck components manufactured by independent suppliers is lower in Europe due to a higher level of vertical integration as compared to North America. In addition to materials, the Company’s cost of sales includes labor and factory overhead, vehicle delivery and warranty.
Schippers (61) President and Chief Financial Officer since January 2018. C. Michael Dozier (58) Executive Vice President since January 2023; Senior Vice President from January 2020 to December 2022; Vice President of PACCAR from August 2019 to December 2019; Vice President of PACCAR and General Manager, Kenworth from April 2016 to July 2019. Darrin C.
Baney (54) Executive Vice President since January 2025; Senior Vice President from January 2024 to December 2024; Vice President of PACCAR and General Manager of Kenworth Truck Company from August 2019 to December 2023. C. Michael Dozier (59) Executive Vice President since January 2023; Senior Vice President from January 2020 to December 2022. Darrin C.
PACCAR’s Zero Emissions Trucks - PACCAR’s research and development efforts include demonstration and development projects for Kenworth, Peterbilt and DAF vehicles, including battery-electric, hydrogen fuel cell, hydrogen combustion and hybrid technologies. PACCAR is currently producing battery-electric Kenworth, Peterbilt and DAF trucks. Low Carbon and Renewable Fuels – All truck sales and diesel engine unit sales are certified to use biofuels.
To develop these industry-leading products and technologies, PACCAR makes significant research and development and capital investments every year. PACCAR’s Zero Emissions Trucks - PACCAR’s research and development efforts include demonstration and development projects for Kenworth, Peterbilt and DAF vehicles, including battery-electric, hydrogen fuel cell, hydrogen combustion and hybrid technologies. PACCAR is currently producing battery-electric Kenworth, Peterbilt and DAF trucks.
PARTS The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles to over 2,300 Kenworth, Peterbilt and DAF dealers in 95 countries around the world.
Production of the year-end 2024 backlog is expected to be substantially completed during 2025. PARTS The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles to over 2,000 Kenworth, Peterbilt and DAF dealers and more than 350 TRP, PACCAR's aftermarket parts brand, stores in 95 countries around the world.
Employee satisfaction and engagement are measured through periodic surveys. Employee training and development programs are extensive and comprehensive, including professional and technical skills training, compliance training, leadership development and management training. The Company has diversity councils throughout its global business that set goals to enhance business success through diverse and inclusive workplaces.
Employee satisfaction and engagement are measured through periodic surveys. Employee training and development programs are extensive and comprehensive, including professional and technical skills training, compliance training, leadership development and management training.
The Company believes the cost of complying with these regulations will not be detrimental to its business. 4 The Company had a total production backlog of $17.4 billion at the end of 2023. Within this backlog, orders scheduled for delivery within three months (90 days) are considered to be firm.
The Company had a total production backlog of $7.6 billion at the end of 2024. Within this backlog, orders scheduled for delivery within three months (90 days) are considered to be firm. The 90‑day backlog approximated $3.8 billion at December 31, 2024, $7.6 billion at December 31, 2023 and $8.0 billion at December 31, 2022.
Sales of industrial winches were less than 1% of total net sales and revenues in 2023, 2022 and 2021. The Braden, Carco and Gearmatic trademarks and trade names are recognized internationally and play an important role in the marketing of those products. PATENTS The Company owns numerous patents which relate to all product lines.
OTHER BUSINESSES Other businesses included the manufacturing of industrial winches in two U.S. plants and marketing them under the BRADEN, CARCO and Gearmatic nameplates through October 31, 2024. Sales of industrial winches were less than 1% of total net sales and revenues in 2024, 2023 and 2022. PATENTS The Company owns numerous patents which relate to all product lines.
The ACT regulation, which has been adopted by several other states, requires an increasing percentage of medium- and heavy-duty trucks sold into the state to be zero emissions. PACCAR established its science-based greenhouse gas emission reduction targets to meet the goals of the Paris Agreement.
The ACT regulation, which has been adopted by several other states, requires an increasing percentage of medium- and heavy-duty trucks sold into the state to be zero emissions. The Company continually monitors developments in emissions and climate change-related laws and regulations in the markets in which the Company conducts business.
The Company invests in technologies that reduce greenhouse gas emissions such as highly fuel-efficient diesel engines, natural gas and biofuel engines, as well as next generation electric, hybrid, and hydrogen powertrains. To develop these industry-leading products and technologies, PACCAR makes significant research and development and capital investments every year.
Innovative Products - A key element of PACCAR’s environmental strategy is to offer our customers commercial vehicles that reduce environmental impacts. The Company invests in technologies that reduce greenhouse gas emissions such as highly fuel-efficient diesel engines, natural gas and biofuel engines, as well as next generation electric, hybrid, and hydrogen powertrains.
Siver (57) Executive Vice President since January 2023; Senior Vice President from January 2017 to December 2022. Kevin D. Baney (53) Senior Vice President since January 2024; Vice President of PACCAR and General Manager of Kenworth Truck Company from August 2019 to December 2023; Assistant General Manager – Sales and Marketing, Kenworth from January 2017 to July 2019. John N.
Montero (41) Vice President of PACCAR and General Manager of Peterbilt since January 2025; Assistant General Manager of Sales and Marketing, Peterbilt from July 2023 to December 2024; General Sales Manager, Peterbilt from August 2019 to June 2023. Brice J.
Connected Trucks and Driver Training - PACCAR Connect fleet management system gives fleet customers real-time information on vehicle and driver performance including fuel consumption, fleet utilization, idle time and route optimization. This information enables customers to improve fleet operating efficiency and reduce fuel consumption and CO2 emissions. PACCAR has introduced technologies that train drivers to operate vehicles more efficiently.
The Company also has engine remanufacturing capacity on its Eindhoven Campus in the Netherlands. 8 Connected Trucks and Driver Training - PACCAR Connect fleet management system gives fleet customers real-time information on vehicle and driver performance including fuel consumption, fleet utilization, idle time and route optimization.
Seidel (56) Vice President of PACCAR and President of DAF Trucks N.V. since August 2022; Director of Finance from October 2017 to July 2022. Jason P. Skoog (52) Vice President of PACCAR and General Manager of Peterbilt since April 2018. James W.
Poplawski (60) Vice President and Controller since May 2023; Senior Operations Controller from July 2020 to April 2023; Corporate Operations Controller from January 2007 to June 2020. Harald P. Seidel (57) Vice President of PACCAR and President of DAF Trucks N.V. since August 2022; Director of Finance of DAF Trucks N.V. from October 2017 to July 2022. Bryan M.
Hubbard (61) Vice President, Global Financial Services since February 2019. A. Lily Ley (58) Vice President and Chief Information Officer since January 2017. Brice J. Poplawski (59) Vice President and Controller since May 2023; Senior Operations Controller from July 2020 to April 2023; Corporate Operations Controller from January 2007 to June 2020. Harald P.
Gryniewicz (57) Vice President, Global Financial Services since February 2025; Vice President of PACCAR and President of PACCAR Financial Corp. from February 2019 to January 2024. A. Lily Ley (59) Vice President and Chief Information Officer since January 2017. Jacob J.
Battery Manufacturing - PACCAR, Cummins, Daimler Trucks and EVE Energy are partnering to produce state-of-the-art commercial vehicle batteries in a 21-gigawatt hour (GWh) factory in Marshall County, Mississippi, subject to regulatory approval. Production is expected to begin in 2027.
This information enables customers to improve fleet operating efficiency and reduce fuel consumption and CO2 emissions. PACCAR has introduced technologies that train drivers to operate vehicles more efficiently. Battery Manufacturing - PACCAR, Cummins, Daimler Trucks and EVE Energy have partnered to produce state-of-the-art commercial vehicle batteries in a 21-gigawatt hour (GWh) factory in Marshall County, Mississippi.
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The 90‑day backlog approximated $7.6 billion at December 31, 2023, $8.0 billion at December 31, 2022 and $5.2 billion at December 31, 2021. Production of the year-end 2023 backlog is expected to be substantially completed during 2024.
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PACCAR's Other business included the manufacturing and marketing of industrial winches through October 31, 2024, when PACCAR sold 100% of the capital stock of PACCAR Winch Inc. TRUCKS PACCAR’s trucks are marketed under the Kenworth, Peterbilt and DAF nameplates.
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OTHER BUSINESSES Other businesses include the manufacturing of industrial winches in two U.S. plants and marketing them under the Braden, Carco and Gearmatic nameplates. The markets for these products are highly competitive, and the Company competes with a number of well established firms.
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PFS matches the maturity and interest rate characteristics of its debt with the maturity and interest rate characteristics of loans and leases.
Removed
Although these patents are considered important to the overall conduct of the Company’s business, no patent or group of patents is considered essential to a material part of the Company’s business.
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PACCAR has publicly disclosed greenhouse gas emissions on its website and through CDP (formerly Carbon Disclosure Project) since 2014 and has established greenhouse gas emission reduction targets approved by the Science Based Targets Initiative (SBTi). PACCAR expects to continue to significantly invest in technologies to improve fuel efficiency for its customers, which would also reduce greenhouse gas emissions.
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The Company’s manufacturing and assembly plants are subject to environmental laws and regulations such as regulating air emissions, water discharges and the handling and disposal of hazardous substances. Failure to comply with these regulations could lead to fines and other penalties.
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Siver (58) Executive Vice President since January 2023; Senior Vice President from January 2017 to December 2022. Laura J.
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PACCAR earned an "A-" score on its CDP environmental report in 2023, placing the Company in the Leadership tier of over 21,000 reporting companies worldwide. The Company has earned an “A” or “A-” score from CDP for the past nine years. PACCAR has established emissions reduction targets in partnership with the Science Based Targets Initiative (SBTi).
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Sitko (48) Vice President and General Manager of PACCAR Parts since January 2025; Assistant General Manager of Operations, Kenworth from June 2022 to December 2024; Assistant General Manager of Sales and Marketing, PACCAR Financial Corp from January 2019 to May 2022. James W.
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SBTi works with more than 7,000 companies worldwide to create a clearly defined path to reduce greenhouse gas emissions in line with the Paris Agreement. Operations - PACCAR is committed to environmental responsibility in the vehicle production process.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

15 edited+1 added−5 removed28 unchanged
Biggest changeSecurity breaches could also result in a violation of U.S. and international privacy and other laws and subject the Company to various litigations and governmental proceedings.
Biggest changeSecurity breaches could also result in a violation of U.S. and international privacy and other laws and subject the Company to various litigations and governmental proceedings. These events could have an adverse impact on the Company’s results of operations and financial condition, damage its reputation, disrupt operations and negatively impact competitiveness in the marketplace.
The pace of transition from diesel combustion to alternative powertrain commercial vehicles is highly uncertain and will be influenced by: • the success of the Company’s research and development programs • customer demand for alternative powertrain vehicles • advancements in battery-electric, hydrogen fuel cell, and hydrogen combustion technology • the cost of batteries, hydrogen fuel cells and liquid hydrogen • global regulations requiring the use of alternative powertrain vehicles and/or providing incentives to facilitate the transition to alternative powertrain commercial vehicles • investments in energy and power infrastructure (e.g., renewable power supply, electric charging services, hydrogen supply and distribution) in key markets, as well as the associated utility costs • the ability of the supply chain to deliver components, including commodities and raw materials that are unique to alternative powertrain commercial vehicles • the success of new and existing competitors in developing and selling alternative powertrain commercial vehicles The Company believes its current strategies, programs and resources are sufficient to address changes in customer demand in the context of climate change and to meet its emissions reduction targets.
The pace of transition from diesel combustion to alternative powertrain commercial vehicles is highly uncertain and will be influenced by: • the success of the Company’s research and development programs • customer demand for alternative powertrain vehicles • advancements in battery-electric, hybrid, hydrogen fuel cell, and hydrogen combustion technology • the cost of batteries, hydrogen fuel cells and liquid hydrogen • global regulations requiring the use of alternative powertrain vehicles and/or providing incentives to facilitate the transition to alternative powertrain commercial vehicles • investments in energy and power infrastructure (e.g., renewable power supply, electric charging services, hydrogen supply and distribution) in key markets, as well as the associated utility costs • the ability of the supply chain to deliver components, including commodities and raw materials that are unique to alternative powertrain commercial vehicles • the success of new and existing competitors in developing and selling alternative powertrain commercial vehicles The Company believes its current strategies, programs and resources are sufficient to address changes in customer demand in the context of climate change and to meet its emissions reduction targets.
PACCAR cannot reasonably predict whether future laws, regulations, and international accords could materially increase its environmental compliance costs, alter its product development strategy, or impact its business, financial condition, or results of operations. Litigation, Product Liability and Regulatory. The Company’s products are subject to recall for environmental, performance and safety-related issues.
PACCAR cannot reasonably predict whether future laws, regulations, and international accords could materially increase its environmental compliance costs, alter its product development strategy, or impact its business, financial condition, or results of operations. Recalls, Litigation, Product Liability and Regulatory. The Company’s products are subject to recall for environmental, performance and safety-related issues.
The Company could experience higher research and development and manufacturing costs due to changes in government requirements for its products, including changes in emissions, fuel, greenhouse gas or other regulations. Emissions Requirements and Reduction Targets. PACCAR’s operations and products are subject to extensive statutory and regulatory requirements governing greenhouse gas and non-greenhouse gas emissions.
The Company could experience higher research and development and manufacturing costs due to changes in government requirements for its products, including changes in emissions, fuel, greenhouse gas or other regulations. 12 Emissions Requirements and Reduction Targets. PACCAR’s operations and products are subject to extensive statutory and regulatory requirements governing greenhouse gas and non-greenhouse gas emissions.
These computer systems and networks may be subject to disruptions during the process of upgrading or replacing software, databases or components; power outages; hardware failures; computer viruses; or outside parties attempting to disrupt the Company’s business or gain unauthorized access to the Company’s electronic data.
These computer systems and networks may be subject to disruptions during the process of upgrading or replacing software, databases or components; power outages; hardware failures; computer viruses/malware; or outside parties attempting to disrupt the Company’s business or gain unauthorized access to the Company’s electronic data.
For additional disclosures regarding accounting estimates, see “Critical Accounting Policies” under Item 7 of this Form 10-K. 12 Taxes. Changes in statutory income tax rates in the countries in which the Company operates impact the Company’s effective tax rate.
For additional disclosures regarding accounting estimates, see “Critical Accounting Policies” under Item 7 of this Form 10-K. Taxes. Changes in statutory income tax rates in the countries in which the Company operates impact the Company’s effective tax rate.
The Company relies on information technology systems and networks, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of its business processes and activities.
Information Technology and Cybersecurity. The Company relies on information technology systems and networks, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of its business processes and activities.
If the Company is not successful in addressing the risks noted above, there may be a material adverse impact on its business, operations, and financial condition. 10 Liquidity Risks, Credit Ratings and Costs of Funds. Disruptions or volatility in global financial markets could limit the Company’s sources of liquidity, or the liquidity of customers, dealers and suppliers.
If the Company is not successful in addressing the risks noted above, there may be a material adverse impact on its business, operations, and financial condition. 11 Liquidity Risks, Credit Ratings and Costs of Funds. Disruptions or volatility in global financial markets could limit the Company’s sources of liquidity, or the liquidity of customers, dealers and suppliers.
Although the financial assets of the Financial Services segment are secured by underlying equipment collateral, in the event a customer cannot meet its obligations to the Company, there is a risk the value of the underlying collateral will not be sufficient to recover the amounts owed to the Company, resulting in credit losses. Interest-Rate Risks.
Although the financial assets of the Financial Services segment are secured by the underlying equipment and sometimes other collateral, in the event a customer cannot meet its obligations to the Company, there is a risk the value of the underlying collateral will not be sufficient to recover the amounts owed to the Company, resulting in credit losses. Interest-Rate Risks.
The Company’s global operations are exposed to political, economic and other risks and events beyond its control in the countries in which the Company operates.
Political, Regulatory and Economic Risks Multinational Operations . The Company’s global operations are exposed to political, economic and other risks and events beyond its control in the countries in which the Company operates.
These include standards imposed by the U.S. Environmental Protection Agency (EPA), the European Union, U.S. state regulatory agencies (such as the California Air Resources Board), regulatory agencies in other international markets where the Company operates, and non-binding international accords related to climate change.
These include standards imposed by the U.S. Environmental Protection Agency (EPA), the European Union, U.S. state regulatory agencies (such as the California Air Resources Board), regulatory agencies in other international markets where the Company operates, and international accords related to climate change including the Paris Agreement.
The Company may be adversely affected by political instabilities, fuel shortages or interruptions in utility or transportation systems, natural calamities, recessions or slower economic growth, inflation, epidemics and pandemics (such as COVID-19), wars, geopolitical tensions and conflicts (such as conflicts in Ukraine and Israel), terrorism and labor strikes.
The Company may be adversely affected by political instabilities, fuel shortages or interruptions in utility or transportation systems, natural calamities, recessions or slower economic growth, inflation, epidemics and pandemics, wars, geopolitical tensions and conflicts, terrorism and labor strikes.
Changes to other taxes or the adoption of other new tax legislation could affect the Company’s provision for income taxes and related tax assets and liabilities. ITEM 1B. UNRESOLVE D STAFF COMMENTS. None.
Changes to other taxes or the adoption of other new tax legislation could affect the Company’s provision for income taxes and related tax assets and liabilities.
The Company’s product planning through 2030 is aligned with these statutory and regulatory requirements, and uses a climate change scenario analysis to limit global warming to below 2°C. Even without legislation to reduce greenhouse gas emissions, PACCAR expects to continue to significantly invest in technologies to improve fuel efficiency for its customers, which would also reduce greenhouse gas emissions.
Even without legislation to reduce greenhouse gas emissions, PACCAR expects to continue to significantly invest in technologies to improve fuel efficiency for its customers, which would also reduce greenhouse gas emissions.
The ACT regulation, which has been adopted by several other states, requires an increasing percentage of medium- and heavy-duty trucks sold into the state to be zero emission. PACCAR established its science-based greenhouse gas emission reduction targets to meet the goals of the Paris Agreement.
The ACT regulation, which has been adopted by several states, requires an increasing percentage of medium- and heavy-duty trucks sold into the state to be zero emission. The Company’s product planning is aligned with these statutory and regulatory requirements, and uses a climate change scenario analysis to limit global warming to below 2°C.
Removed
All of the Company’s finance contracts which used to reference LIBOR (London Inter-Bank Offered Rate), including dealer wholesale financing contracts, retail loan and lease contracts, medium-term notes, hedging instruments and line of credit arrangements, have been transitioned to alternative benchmark rates.
Added
The EU regulations have set CO2 emission reduction targets and require a significant portion of vehicles sold to be zero or near zero emission. Not meeting these targets would result in significant fines by the EU commission.
Removed
Changes to other benchmark interest rates, such as CDOR (Canadian Dollar Offered Rate), will have an uncertain impact on finance receivables and other financial obligations, the Company’s future cost of funds and/or access to capital markets.
Removed
The Company will attempt to minimize the impact of differences between the current and replacement benchmark rates through pricing adjustments on the financing provided by PFS, but it is not certain the Company will be able to do so.
Removed
The Company does not expect the cessation of CDOR or the anticipated changes to other benchmark rates will have a material impact on the results of operations. Information Technology and Cybersecurity.
Removed
These events could have an adverse impact on the Company’s results of operations and financial condition, damage its reputation, disrupt operations and negatively impact competitiveness in the marketplace. 11 Political, Regulatory and Economic Risks Multinational Operations .

Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−0 removed1 unchanged
Biggest changeITEM 2. PR OPERTIES. The Company and its subsidiaries own and operate manufacturing plants in five U.S. states, three countries in Europe, and in Australia, Brasil, Canada and Mexico. The Company also has 18 parts distribution centers, many sales and service offices, and finance and administrative offices which are operated in owned or leased premises in these and other locations.
Biggest changeITEM 2. PR OPERTIES. The Company and its subsidiaries own and operate manufacturing plants in four U.S. states, three countries in Europe, and in Australia, Brasil, Canada and Mexico.
America Truck 4 1 1 1 3 1 Parts 7 2 2 1 4 2 Other 2 — — — — —
America Truck 4 1 1 1 3 1 Parts 7 2 2 1 5 3
Facilities for product testing and research and development are located in the state of Washington and the Netherlands. The Company also has an innovation center in Sunnyvale, California. The Company’s corporate headquarters is located in owned premises in Bellevue, Washington. The Company considers all of the properties used by its businesses to be suitable for their intended purposes.
The Company also has an innovation center in Sunnyvale, California. The Company’s corporate headquarters is located in owned premises in Bellevue, Washington. The Company considers all of the properties used by its businesses to be suitable for their intended purposes.
Added
The Company also has 20 parts distribution centers, many sales and service offices, and finance and administrative offices which are operated in owned or leased premises in these and other locations, including a service office in India. Facilities for product testing and research and development are located in the state of Washington and the Netherlands.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS. Refer to Note L – “Commitments and Contingencies” in the Notes to Consolidated Financial Statements (Part II, Item 8) for discussion on litigation matters, which is incorporated by reference herein. ITEM 4. MINE SAF ETY DISCLOSURES. Not applicable. 13 PAR T II
Biggest changeITEM 3. LEGAL PROCEEDINGS. Refer to Note L – “Commitments and Contingencies” in the Notes to Consolidated Financial Statements (Part II, Item 8) for discussion on litigation matters, which is incorporated by reference herein. ITEM 4. MINE SAF ETY DISCLOSURES. Not applicable. 14 PAR T II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

10 edited+0 added−2 removed2 unchanged
Biggest changeThe comparison assumes that $100 was invested December 31, 2018, in the Company’s common stock and in the stated indices and assumes reinvestment of dividends. 2018 2019 2020 2021 2022 2023 PACCAR Inc 100 145.05 162.08 171.19 200.29 310.48 S&P 500 Index 100 131.49 155.68 200.37 164.08 207.21 Current Peer Group Index 100 128.46 171.67 209.23 228.09 275.53 Prior Peer Group Index 100 128.32 170.13 209.74 230.29 272.34 15 (b) Use of Proceeds from Registered Securities.
Biggest changeThe comparison assumes that $100 was invested December 31, 2019, in the Company’s common stock and in the stated indices and assumes reinvestment of dividends. 2019 2020 2021 2022 2023 2024 PACCAR Inc 100 111.74 118.03 138.09 214.05 237.19 S&P 500 Index 100 118.40 152.39 124.79 157.59 197.02 Peer Group Index 100 133.64 162.88 177.56 214.49 260.91 16 (b) Use of Proceeds from Registered Securities.
Not applicable. (c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers. On December 4, 2018, PACCAR’s Board of Directors approved the repurchase of up to $500.0 million of the Company’s outstanding common stock. As of December 31, 2023, the Company has repurchased $110.0 million of shares under this plan.
Not applicable. (c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers. On December 4, 2018, PACCAR’s Board of Directors approved the repurchase of up to $500.0 million of the Company’s outstanding common stock. As of December 31, 2024, the Company has repurchased $110.0 million of shares under this plan.
There were 1,426 record holders of the common stock at December 31, 2023. The Company expects to continue paying regular cash dividends, although there is no assurance as to future dividends because they are dependent upon future earnings, capital requirements and financial conditions. Securities Authorized for Issuance Under Equity Compensation Plans.
There were 1,392 record holders of the common stock at December 31, 2024. The Company expects to continue paying regular cash dividends, although there is no assurance as to future dividends because they are dependent upon future earnings, capital requirements and financial conditions. Securities Authorized for Issuance Under Equity Compensation Plans.
The following table provides information as of December 31, 2023 regarding compensation plans under which PACCAR equity securities are authorized for issuance.
The following table provides information as of December 31, 2024 regarding compensation plans under which PACCAR equity securities are authorized for issuance.
The number of securities to be issued includes those issuable under the PACCAR Inc Long Term Incentive Plan (LTI Plan) and the Restricted Stock and Deferred Compensation Plan for Non-Employee Directors (RSDC Plan). Securities to be issued include 650,075 shares that represent deferred cash awards payable in stock.
The number of securities to be issued includes those issuable under the PACCAR Inc Long Term Incentive Plan (LTI Plan) and the Restricted Stock and Deferred Compensation Plan for Non-Employee Directors (RSDC Plan). Securities to be issued include 682,514 shares that represent deferred cash awards payable in stock.
The following line graph compares the yearly percentage change in the cumulative total stockholder return on the Company’s common stock, to the cumulative total return of the Standard & Poor’s Composite 500 Stock Index and the return of the industry peer group of companies identified below (the “Current Peer Group Index” and “Prior Peer Group Index”) for the last five fiscal years ended December 31, 2023.
The following line graph compares the yearly percentage change in the cumulative total stockholder return on the Company’s common stock, to the cumulative total return of the Standard & Poor’s Composite 500 Stock Index and the return of the industry peer group of companies identified below (the “Peer Group Index”) for the last five fiscal years ended December 31, 2024.
Number of Securities Granted and to be Issued Related to Outstanding Options and Restricted Stock Units Weighted-average Exercise Price of Outstanding Options Securities Available for Future Grant Stock compensation plans approved by stockholders 4,917,291 $ 57.77 15,018,410 All stock compensation plans have been approved by the stockholders.
Number of Securities Granted and to be Issued Related to Outstanding Options and Restricted Stock Units Weighted-average Exercise Price of Outstanding Options Securities Available for Future Grant Stock compensation plans approved by stockholders 4,564,123 $ 68.77 14,247,054 All stock compensation plans have been approved by the stockholders.
Securities available for future grant are authorized under the following two plans: (i) 14,072,474 shares under the LTI Plan, and (ii) 945,936 shares under the RSDC Plan. 14 Stockholder Return Performance Graph.
Securities available for future grant are authorized under the following two plans: (i) 13,321,465 shares under the LTI Plan, and (ii) 925,589 shares under the RSDC Plan. 15 Stockholder Return Performance Graph.
The Current Peer Index also includes AGCO Corporation, Caterpillar Inc., Cummins Inc., Deere & Company, Eaton Corporation, Oshkosh Corporation, TRATON SE (effective January 1, 2021), Navistar International Corporation (from 2018 through 2020) and AB Volvo.
The Peer Group Index includes AGCO Corporation, Caterpillar Inc., Cummins Inc., Daimler Truck Holdings AG (effective January 1, 2022), Deere & Company, Eaton Corporation, Iveco Group N.V. (effective January 1, 2022), Oshkosh Corporation, TRATON SE (effective January 1, 2021), Navistar International Corporation (from 2019 through 2020), Terex Corporation and AB Volvo.
There were no repurchases made during the fourth quarter of 2023. ITEM 6. [Reserved] 16
There were no repurchases made during the fourth quarter of 2024.
Removed
Effective January 1, 2023, the Company revised its peer group to include Daimler Truck Holdings AG (effective January 1, 2022) and Iveco Group N.V. (effective January 1, 2022), direct competitors and publicly traded companies, and Terex Corporation (effective January 1, 2019), a more representative Company peer. The Company removed CNH Industrial N.V., which spun-off Iveco, and Dana Incorporated.
Removed
The Prior Peer Group Index consisted of AGCO Corporation, Caterpillar Inc., CNH Industrial N.V., Cummins Inc., Dana Incorporated, Deere & Company, Eaton Corporation, Navistar International Corporation, Oshkosh Corporation, TRATON SE and AB Volvo.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

89 edited+23 added−21 removed32 unchanged
Biggest changeThe following table summarizes operating lease, rental and other revenues and depreciation and other expenses: ( $ in millions ) Year Ended December 31, 2023 2022 Operating lease and rental revenues $ 751.8 $ 807.2 Used truck sales 23.0 50.5 Insurance, franchise and other revenues 27.8 19.0 Operating lease, rental and other revenues $ 802.6 $ 876.7 Depreciation of operating lease equipment $ 488.6 $ 474.9 Vehicle operating expenses 73.1 33.9 Cost of used truck sales 24.1 49.3 Insurance, franchise and other expenses 4.9 2.7 Depreciation and other expenses $ 590.7 $ 560.8 23 The major factors for the changes in operating lease, rental and other revenues, depreciation and other expenses and lease margin between 2023 and 2022 are outlined below: ( $ in millions ) OPERATING LEASE, RENTAL AND OTHER REVENUES DEPRECIATION AND OTHER EXPENSES LEASE MARGIN 2022 $ 876.7 $ 560.8 $ 315.9 (Decrease) increase Used truck sales (27.8 ) (25.6 ) (2.2 ) Results on returned lease assets 107.6 (107.6 ) Average operating lease assets (129.4 ) (110.3 ) (19.1 ) Revenue and cost per asset 53.1 42.1 11.0 Currency translation and other 30.0 16.1 13.9 Total (decrease) increase (74.1 ) 29.9 (104.0 ) 2023 $ 802.6 $ 590.7 $ 211.9 • Lower sales volume and lower market prices of used truck on trade, primarily in Europe, decreased revenues by $27.8 million and related depreciation and other expenses by $25.6 million. • Results on returned lease assets increased depreciation and other expenses by $107.6 million primarily due to lower gains on sales of returned lease units as a result of lower used truck market values. • Average operating lease assets decreased $280.7 million (excluding foreign exchange effects), which decreased revenues by $129.4 million and related depreciation and other expenses by $110.3 million. • Revenue per asset increased $53.1 million primarily due to higher lease rates reflecting higher average truck value financed and higher market rates.
Biggest changeThe higher portfolio yields were primarily due to higher market rates in all markets except Brasil. • Higher borrowing rates (4.7% in 2024 compared to 3.9% in 2023) increased interest and other borrowing expenses by $113.1 million and were primarily due to higher debt market rates in all markets except Brasil. • The currency translation effects reflect a decrease in the value of foreign currencies relative to the U.S. dollar, primarily the Brazilian real and Mexican peso. 24 The following table summarizes operating lease, rental and other revenues and depreciation and other expenses: ($ in millions) Year Ended December 31, 2024 2023 Operating lease and rental revenues $ 677.4 $ 751.8 Used truck sales 95.1 23.0 Insurance, franchise and other revenues 31.1 27.8 Operating lease, rental and other revenues $ 803.6 $ 802.6 Depreciation of operating lease equipment $ 544.7 $ 488.6 Vehicle operating expenses 67.8 73.1 Cost of used truck sales 98.1 24.1 Insurance, franchise and other expenses 7.9 4.9 Depreciation and other expenses $ 718.5 $ 590.7 The major factors for the changes in operating lease, rental and other revenues, depreciation and other expenses and lease margin between 2024 and 2023 are outlined below: ($ in millions) OPERATING LEASE, RENTAL AND OTHER REVENUES DEPRECIATION AND OTHER EXPENSES LEASE MARGIN 2023 $ 802.6 $ 590.7 $ 211.9 Increase (decrease) Used truck sales 72.2 74.0 (1.8 ) Results on returned lease assets 99.7 (99.7 ) Average operating lease assets (148.2 ) (132.1 ) (16.1 ) Revenue and cost per asset 78.2 85.1 (6.9 ) Currency translation and other (1.2 ) 1.1 (2.3 ) Total increase (decrease) 1.0 127.8 (126.8 ) 2024 $ 803.6 $ 718.5 $ 85.1 • Higher sales volume, partially offset by lower market prices of used truck on trade, increased revenues by $72.2 million and related depreciation and other expenses by $74.0 million. • Results on returned lease assets increased depreciation and other expenses by $99.7 million, primarily due to losses on sale of returned lease units in 2024 (compared to gains in 2023) and impairment on existing used truck inventories, mainly in Europe, as a result of lower used truck market values. • Average operating lease assets decreased $365.9 million (excluding foreign exchange effects), which decreased revenues by $148.2 million and related depreciation and other expenses by $132.1 million. • Revenue per asset increased $78.2 million primarily due to higher average truck values financed.
The Company expects to fund its maturing Financial Services debt obligations principally from funds provided by collections from customers on loans and lease contracts, as well as from the proceeds of commercial paper and medium-term note borrowings. Purchase obligations are the Company’s contractual commitments to acquire future production inventory and capital equipment. Other obligations primarily include commitments to commodities.
The Company expects to fund its maturing Financial Services debt obligations principally from funds provided by collections from customers on loans and lease contracts, as well as from the proceeds of commercial paper and medium-term note borrowings. Purchase obligations are the Company’s contractual commitments to acquire future production inventory and capital equipment. Other obligations primarily include commitments for commodities.
Market share data discussed below is provided by third-party sources and is measured by either retail sales or registrations for the Company’s dealer network as a percentage of total retail sales or registrations depending on the geographic market. In the U.S. and Canada, market share is based on retail sales. In Europe, market share is based on registrations.
Market share data discussed below is provided by third-party sources and is measured by either retail sales or registrations for the Company’s dealer network as a percentage of total retail sales or registrations depending on the geographic market. In the U.S. and Canada, market share is based on retail sales. In Europe, market share is based primarily on registrations.
Small balance receivables on non-accrual status with similar risk characteristics are evaluated as a separate pool to determine the appropriate reserve for losses using the historical loss information discussed below. 31 The Company evaluates finance receivables that are not individually evaluated and share similar risk characteristics on a collective basis and determines the general allowance for credit losses for both retail and wholesale receivables based on historical loss information, using past due account data, current market conditions, and expected changes in future macroeconomic conditions that affect collectability.
Small balance receivables on non-accrual status with similar risk characteristics are evaluated as a separate pool to determine the appropriate reserve for losses using the historical loss information discussed below. 32 The Company evaluates finance receivables that are not individually evaluated and share similar risk characteristics on a collective basis and determines the general allowance for credit losses for both retail and wholesale receivables based on historical loss information, using past due account data, current market conditions, and expected changes in future macroeconomic conditions that affect collectability.
The Company continues to focus on maintaining low past due balances. When the Company modifies a 30+ days past due account, the customer is then generally considered current under the revised contractual terms.
The Company continues to focus on maintaining low past due balances. 26 When the Company modifies a 30+ days past due account, the customer is then generally considered current under the revised contractual terms.
Management takes actions to minimize warranty costs through quality-improvement programs; however, actual claim costs incurred could materially differ from the estimated amounts and require adjustments to the reserve. Historically those adjustments have not been material. Over the past two years, warranty expense as a percentage of Truck, Parts and Other net sales and revenues has ranged between 1.9% and 2.9%.
Management takes actions to minimize warranty costs through quality-improvement programs; however, actual claim costs incurred could materially differ from the estimated amounts and require adjustments to the reserve. Historically those adjustments have not been material. Over the past two years, warranty expense as a percentage of Truck, Parts and Other net sales and revenues has ranged between 2.5% and 2.9%.
The adequacy of the allowance is evaluated quarterly based on the most recent past due account information and current and future market conditions. As accounts become past due, the likelihood that they will not be fully collected increases. The Company’s experience indicates the probability of not fully collecting past due accounts ranges between 10% and 70%.
The adequacy of the allowance is evaluated quarterly based on the most recent past due account information and current and future market conditions. As accounts become past due, the likelihood that they will not be fully collected increases. The Company’s experience indicates the probability of not fully collecting past due accounts ranges between 10% and 80%.
A more detailed description of these and other risks is included under the heading Part I, Item 1A, “Risk Factors” and in Note L in the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K. 32
A more detailed description of these and other risks is included under the heading Part I, Item 1A, “Risk Factors” and in Note L in the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K. 33
The primary sources of borrowings in the capital markets are commercial paper and medium-term notes issued in the public markets and, to a lesser extent, bank loans. In November 2021, the Company’s U.S. finance subsidiary, PACCAR Financial Corp. (PFC), filed a shelf registration under the Securities Act of 1933.
The primary sources of borrowings in the capital markets are commercial paper and medium-term notes issued in the public markets and, to a lesser extent, bank loans. 29 In November 2024, the Company’s U.S. finance subsidiary, PACCAR Financial Corp. (PFC), filed a shelf registration under the Securities Act of 1933.
Over the past two years, the Company’s year-end 30+ days past due accounts have ranged between .4% and 1.0% of loan and lease receivables. Historically, a 100 basis point increase in the 30+ days past due percentage has resulted in an increase in credit losses of 2 to 25 basis points of receivables.
Over the past two years, the Company’s year-end 30+ days past due accounts have ranged between 1.0% and 1.3% of loan and lease receivables. Historically, a 100 basis point increase in the 30+ days past due percentage has resulted in an increase in credit losses of 1 to 25 basis points of receivables.
The Company has accrued the estimated costs to investigate and complete cleanup actions where it is probable that the Company will incur such costs in the future. Expenditures related to environmental activities in the years ended December 31, 2023 and 2022 were $3.0 million and $4.6 million, respectively.
The Company has accrued the estimated costs to investigate and complete cleanup actions where it is probable that the Company will incur such costs in the future. Expenditures related to environmental activities in the years ended December 31, 2024 and 2023 were $4.4 million and $3.0 million, respectively.
The total amount of medium-term notes outstanding for PFPL Australia as of December 31, 2023 was 850.0 million Australian dollars. In May 2021, the Company’s Canadian subsidiary, PACCAR Financial Ltd. (PFL Canada), established a medium-term note program. The program does not limit the principal amount of debt securities that may be issued under the program.
The total amount of medium-term notes outstanding for PFPL Australia as of December 31, 2024 was 700.0 million Australian dollars. In May 2021, the Company’s Canadian subsidiary, PACCAR Financial Ltd. (PFL Canada), established a medium-term note program. The program does not limit the principal amount of debt securities that may be issued under the program.
If the 2023 warranty expense had been .2% higher as a percentage of net sales and revenues in 2023, warranty expense would have increased by approximately $67 million. FORWARD-LOOKING STATEMENTS: This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
If the 2024 warranty expense had been .2% higher as a percentage of net sales and revenues in 2024, warranty expense would have increased by approximately $63 million. FORWARD-LOOKING STATEMENTS: This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
If past dues were 100 basis points higher or 2.0% as of December 31, 2023, the Company’s estimate of credit losses would likely have increased by a range of $2 to $35 million depending on the extent of the past dues, the estimated value of the collateral as compared to amounts owed and general economic factors.
If past dues were 100 basis points higher or 2.3% as of December 31, 2024, the Company’s estimate of credit losses would likely have increased by a range of $1 to $35 million depending on the extent of the past dues, the estimated value of the collateral as compared to amounts owed and general economic factors.
Total cash commitments for borrowings and interest on term debt were $14.94 billion and were related to the Financial Services segment. As described in Note J of the consolidated financial statements, borrowings consist primarily of term notes and commercial paper issued by the Financial Services segment.
Total cash commitments for borrowings and interest on term debt were $16.98 billion and were related to the Financial Services segment. As described in Note J of the consolidated financial statements, borrowings consist primarily of term notes and commercial paper issued by the Financial Services segment.
The following table summarizes the Company’s 30+ days past due accounts: At December 31, 2023 2022 Percentage of retail loan and lease accounts 30+ days past due: U.S. and Canada .8 % .1 % Europe .5 % .2 % Mexico, Australia, Brasil and other 1.9 % 1.6 % Worldwide 1.0 % .4 % Accounts 30+ days past due increased to 1.0% at December 31, 2023 from .4% at December 31, 2022.
The following table summarizes the Company’s 30+ days past due accounts: At December 31, 2024 2023 Percentage of retail loan and lease accounts 30+ days past due: U.S. and Canada 1.2 % .8 % Europe .8 % .5 % Mexico, Australia, Brasil and other 2.0 % 1.9 % Worldwide 1.3 % 1.0 % Accounts 30+ days past due increased to 1.3% at December 31, 2024 from 1.0% at December 31, 2023.
At December 31, 2023, the aggregate residual value of equipment on operating leases in the Financial Services segment and residual value guarantee on trucks accounted for as operating leases in the Truck segment was $1.49 billion.
At December 31, 2024, the aggregate residual value of equipment on operating leases in the Financial Services segment and residual value guarantee on trucks accounted for as operating leases in the Truck segment was $1.16 billion.
Factors for which the Company is unable to specifically quantify the impact include market demand, fuel prices, freight tonnage and economic conditions affecting the Company’s results of operations. 18 2023 Compared to 2022: Truck The Company’s Truck segment accounted for 77% of revenues in 2023 compared to 75% in 2022.
Factors for which the Company is unable to specifically quantify the impact include market demand, fuel prices, freight tonnage and economic conditions affecting the Company’s results of operations. 19 2024 Compared to 2023: Truck The Company’s Truck segment accounted for 74% of revenues in 2024 compared to 77% in 2023.
In North America, trucks are sold under the Kenworth and Peterbilt nameplates, in Europe, under the DAF nameplate and in Australia and South America, under the Kenworth and DAF nameplates. The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles.
In the U.S. and Canada, trucks are sold under the Kenworth and Peterbilt nameplates, in Europe, under the DAF nameplate and in Mexico, Australia and South America, under the Kenworth and DAF nameplates. The Parts segment includes the distribution of aftermarket parts for trucks and related commercial vehicles.
As of December 31, 2023, the Company’s European finance subsidiary, PACCAR Financial Europe, had €911.7 million available for issuance under a €2.50 billion medium-term note program listed on the Euro MTF Market of the Luxembourg Stock Exchange. This program renews annually and expires in September 2024.
As of December 31, 2024, the Company’s European finance subsidiary, PACCAR Financial Europe, had €597.9 million available for issuance under a €2.50 billion medium-term note program listed on the Euro MTF Market of the Luxembourg Stock Exchange. This program renews annually and expires in July 2025.
At December 31, 2023, 6.32 billion Mexican pesos were available for issuance. In August 2018, the Company’s Australian subsidiary, PACCAR Financial Pty. Ltd. (PFPL Australia), registered a medium-term note program. The program does not limit the principal amount of debt securities that may be issued under the program.
At December 31, 2024, 5.57 billion Mexican pesos were available for issuance. In August 2018, the Company’s Australian subsidiary, PACCAR Financial Pty. Ltd. (PFPL Australia), established a medium-term note program. The program does not limit the principal amount of debt securities that may be issued under the program.
Parts SG&A expense in 2023 increased to $238.0 million from $216.3 million in 2022. The increase was primarily due to higher salaries and related expenses, partially offset by lower sales and marketing costs.
Parts SG&A expense in 2024 increased to $246.4 million from $238.0 million in 2023. The increase was primarily due to higher salaries and related expenses, partially offset by lower sales and marketing costs.
A 10% decrease in used truck values worldwide, if expected to persist over the remaining maturities of the Company’s operating leases, would reduce residual value estimates and result in the Company recording additional depreciation expense of approximately $73.6 million in 2024, $34.8 million in 2025, $20.5 million in 2026, $13.1 million in 2027, $6.8 million in 2028 and thereafter.
A 10% decrease in used truck values worldwide, if expected to persist over the remaining maturities of the Company’s operating leases, would reduce residual value estimates and result in the Company recording additional depreciation expense of approximately $46.3 million in 2025, $20.5 million in 2026, $19.4 million in 2027, $16.4 million in 2028, and $13.2 million in 2029 and thereafter.
The following table summarizes the provision for losses on receivables and net charge-offs: 2023 2022 ( $ in millions ) PROVISION FOR LOSSES ON RECEIVABLES NET CHARGE-OFFS PROVISION FOR LOSSES ON RECEIVABLES NET CHARGE-OFFS U.S. and Canada $ 7.9 $ 8.6 $ (5.1 ) $ (.9 ) Europe 4.4 2.9 .8 .6 Mexico, Australia, Brasil and other 19.0 11.8 9.8 (.4 ) $ 31.3 $ 23.3 $ 5.5 $ (.7 ) The provision for losses on receivables increased to $31.3 million in 2023 from $5.5 million in 2022, primarily driven by higher charge-offs, portfolio growth and higher past due balances in 2023.
The following table summarizes the provision for losses on receivables and net charge-offs: 2024 2023 ($ in millions) PROVISION FOR LOSSES ON RECEIVABLES NET CHARGE- OFFS PROVISION FOR LOSSES ON RECEIVABLES NET CHARGE- OFFS U.S. and Canada $ 42.5 $ 29.4 $ 7.9 $ 8.6 Europe 16.8 15.8 4.4 2.9 Mexico, Australia, Brasil and other 16.3 8.3 19.0 11.8 $ 75.6 $ 53.5 $ 31.3 $ 23.3 25 The provision for losses on receivables increased to $75.6 million in 2024 from $31.3 million in 2023, primarily driven by portfolio growth, an increase in the Company’s 30+ past due accounts and higher charge-offs in the U.S. and Canada and Europe.
The Company modified $35.0 million, primarily in Europe, and $8.9 million of accounts worldwide during the fourth quarter of 2023 and the fourth quarter of 2022, respectively, which were 30+ days past due and became current at the time of modification.
The Company modified $40.7 million and $35.0 million of accounts worldwide during the fourth quarter of 2024 and the fourth quarter of 2023, respectively, which were 30+ days past due and became current at the time of modification.
As a percentage of sales, Parts SG&A was 3.7% in 2023 and 3.8% in 2022. 21 Financial Services The Company’s Financial Services segment accounted for 5% of revenues in 2023 and 2022.
As a percentage of sales, Parts SG&A was 3.7% in 2024 and 3.7% in 2023. 22 Financial Services The Company’s Financial Services segment accounted for 6% of revenues in 2024 compared to 5% in 2023.
The total amount of medium-term notes outstanding for PFC as of December 31, 2023 was $6.10 billion. In January 2024, PFC issued $600.0 million of medium-term notes under this registration. The registration expires in November 2024 and does not limit the principal amount of debt securities that may be issued during that period.
The total amount of medium-term notes outstanding for PFC as of December 31, 2024 was $7.25 billion. The registration expires in November 2027 and does not limit the principal amount of debt securities that may be issued during that period.
PFS income before income taxes decreased to $540.3 million in 2023 from $588.9 million in 2022, primarily due to lower operating lease margins, reflecting lower results on returned lease assets, partially offset by higher finance margins.
PFS income before income taxes decreased to $435.6 million in 2024 from $540.3 million in 2023, primarily due to lower operating lease margins, reflecting lower results on returned lease assets, partially offset by higher finance margins from a higher asset portfolio and higher portfolio yields.
Insignificant delays are modifications extending terms up to three months for customers experiencing some short-term financial stress, but not considered to be in financial difficulty. Modifications for credit reasons are changes to contract terms for customers considered to be in financial difficulty.
The Company may modify loans and finance leases for commercial reasons or for credit reasons. Modifications for commercial reasons are changes to contract terms for customers that are not considered to be in financial difficulty. Insignificant delays are modifications extending terms up to three months for customers experiencing some short-term financial stress, but not considered to be in financial difficulty.
( $ in millions ) Year Ended December 31, 2023 2022 % CHANGE Parts net sales and revenues: U.S. and Canada $ 4,441.7 $ 4,087.5 9 Europe 1,357.0 1,141.1 19 Mexico, South America, Australia and other 615.7 535.7 15 $ 6,414.4 $ 5,764.3 11 Parts income before income taxes $ 1,702.6 $ 1,446.6 18 Pre-tax return on revenues 26.5 % 25.1 % The Company’s worldwide parts net sales and revenues increased to $6.41 billion in 2023 from $5.76 billion in 2022 primarily due to higher price realization in all markets.
($ in millions) Year Ended December 31, 2024 2023 % CHANGE Parts net sales and revenues: U.S. and Canada $ 4,547.5 $ 4,441.7 2 Europe 1,424.3 1,357.0 5 Mexico, South America, Australia and other 694.6 615.7 13 $ 6,666.4 $ 6,414.4 4 Parts income before income taxes $ 1,704.5 $ 1,702.6 Pre-tax return on revenues 25.6 % 26.5 % The Company’s worldwide parts net sales and revenues increased to $6.67 billion in 2024 from $6.41 billion in 2023 primarily due to higher sales in all markets.
The following provides an analysis of the results of operations for the Company’s three reportable segments - Truck, Parts and Financial Services. Where possible, the Company has quantified the impact of factors identified in the following discussion and analysis.
In 2024, Other includes a $14.0 million gain on sale of the winch business. The following provides an analysis of the results of operations for the Company’s three reportable segments - Truck, Parts and Financial Services. Where possible, the Company has quantified the impact of factors identified in the following discussion and analysis.
The change in cash and cash equivalents is summarized below: ($ in millions ) Year Ended December 31, 2023 2022 Operating activities: Net income $ 4,600.8 $ 3,011.6 Net income items not affecting cash 698.0 601.6 Pension contributions (27.3 ) (39.1 ) Changes in operating assets and liabilities, net (1,081.5 ) (547.1 ) Net cash provided by operating activities 4,190.0 3,027.0 Net cash used in investing activities (2,871.0 ) (2,033.0 ) Net cash provided by financing activities 1,102.2 304.9 Effect of exchange rate changes on cash 69.6 (36.3 ) Net increase in cash and cash equivalents 2,490.8 1,262.6 Cash and cash equivalents at beginning of the year 4,690.9 3,428.3 Cash and cash equivalents at end of the year $ 7,181.7 $ 4,690.9 26 Operating activities: Cash provided by operations increased by $1.16 billion to $4.19 billion in 2023 from $3.03 billion in 2022.
The change in cash and cash equivalents is summarized below: ($ in millions) Year Ended December 31, 2024 2023 Operating activities: Net income $ 4,162.0 $ 4,600.8 Net income items not affecting cash 939.5 698.0 Pension contributions (40.8 ) (27.3 ) Changes in operating assets and liabilities, net (419.8 ) (1,081.5 ) Net cash provided by operating activities 4,640.9 4,190.0 Net cash used in investing activities (4,487.3 ) (2,871.0 ) Net cash (used in) provided by financing activities (123.1 ) 1,102.2 Effect of exchange rate changes on cash and cash equivalents (151.4 ) 69.6 Net (decrease) increase in cash and cash equivalents (120.9 ) 2,490.8 Cash and cash equivalents at beginning of period 7,181.7 4,690.9 Cash and cash equivalents at end of period $ 7,060.8 $ 7,181.7 Operating activities: Cash provided by operations increased by $450.9 million to $4.64 billion in 2024 from $4.19 billion in 2023.
At December 31, 2023, 30+ days past dues were 1.0%.
At December 31, 2024, 30+ days past dues were 1.3%.
DAF’s market share in the 6 to 16-tonne market in 2023 was 9.1% compared to 9.7% in 2022. The over 16‑tonne truck market in Brasil in 2023 decreased to 82,100 units from 97,900 units in 2022, and DAF Brasil achieved a record 10.2% market share in 2023 compared to 6.9% in 2022.
DAF’s market share in the 6 to 16-tonne market in 2024 was 9.5% compared to 9.1% in 2023. The over 16‑tonne truck market in Brasil in 2024 increased to 97,700 units from 82,100 units in 2023, and DAF Brasil's market share was 9.9% in 2024 compared to 10.2% in 2023.
The Company’s modifications typically result in granting more time to pay the contractual amounts owed and charging a fee and interest for the term of the modification.
Modifications for credit reasons are changes to contract terms for customers considered to be in financial difficulty. The Company’s modifications typically result in granting more time to pay the contractual amounts owed and charging a fee and interest for the term of the modification.
( $ in millions , except per share amounts) Year Ended December 31, 2023 2022 Net sales and revenues: Truck $ 26,846.4 $ 21,486.2 Parts 6,414.4 5,764.3 Other 54.7 63.8 Truck, Parts and Other 33,315.5 27,314.3 Financial Services 1,811.9 1,505.4 $ 35,127.4 $ 28,819.7 Income before income taxes: Truck $ 3,799.9 $ 1,753.3 Parts 1,702.6 1,446.6 Other* (616.8 ) (1.1 ) Truck, Parts and Other 4,885.7 3,198.8 Financial Services 540.3 588.9 Investment income 292.2 61.0 Income taxes (1,117.4 ) (837.1 ) Net Income $ 4,600.8 $ 3,011.6 Diluted earnings per share $ 8.76 $ 5.75 After-tax return on revenues 13.1 % 10.4 % * In 2023, Other includes a $600.0 million non-recurring charge related to civil litigation in Europe (EC-related claims) in the first quarter 2023.
($ in millions, except per share amounts) Year Ended December 31, 2024 2023 Net sales and revenues: Truck $ 24,838.4 $ 26,846.4 Parts 6,666.4 6,414.4 Other 59.5 54.7 Truck, Parts and Other 31,564.3 33,315.5 Financial Services 2,099.5 1,811.9 $ 33,663.8 $ 35,127.4 Income before income taxes: Truck $ 2,852.6 $ 3,799.9 Parts 1,704.5 1,702.6 Other* 13.5 (616.8 ) Truck, Parts and Other 4,570.6 4,885.7 Financial Services 435.6 540.3 Investment income 394.7 292.2 Income taxes (1,238.9 ) (1,117.4 ) Net income $ 4,162.0 $ 4,600.8 Diluted earnings per share $ 7.90 $ 8.76 After-tax return on revenues 12.4 % 13.1 % * In 2023, Other includes a $600.0 million non-recurring charge related to civil litigation in Europe (EC-related claims) in the first quarter 2023.
LIQUIDITY AND CAPITAL RESOURCES: ( $ in millions ) At December 31, 2023 2022 Cash and cash equivalents $ 7,181.7 $ 4,690.9 Marketable securities 1,822.6 1,614.2 $ 9,004.3 $ 6,305.1 The Company’s total cash and marketable securities at December 31, 2023, increased $2.70 billion from the balances at December 31, 2022.
LIQUIDITY AND CAPITAL RESOURCES: ($ in millions) At December 31, 2024 2023 Cash and cash equivalents $ 7,060.8 $ 7,181.7 Marketable securities 2,778.8 1,822.6 $ 9,839.6 $ 9,004.3 The Company’s total cash and marketable securities at December 31, 2024 increased $835.3 million from the balances at December 31, 2023.
In 2023, industry retail sales in the heavy-duty market in the U.S. and Canada increased to 297,000 units from 283,500 units in 2022. The Company’s heavy-duty truck retail market share was 29.5% in 2023 compared to 29.8% in 2022. The medium-duty market was 105,300 units in 2023 compared to 88,300 units in 2022.
In 2024, industry retail sales in the heavy-duty market in the U.S. and Canada decreased to 268,100 units from 297,000 units in 2023. The Company’s heavy-duty truck retail market share was 30.7% in 2024 compared to 29.5% in 2023. The medium-duty market was 110,400 units in 2024 compared to 105,300 units in 2023.
See the Forward-Looking Statements section of Management’s Discussion and Analysis for factors that may affect these outlooks. RESULTS OF OPERATIONS: The Company’s results of operations for the years ended December 31, 2023 and 2022 are presented below. For information on the year ended December 31, 2021, refer to Part II, Item 7 in the 2022 Annual Report on Form 10-K.
RESULTS OF OPERATIONS: The Company’s results of operations for the years ended December 31, 2024 and 2023 are presented below. For information on the year ended December 31, 2022, refer to Part II, Item 7 in the 2023 Annual Report on Form 10-K.
The increase in Parts segment income before income taxes and pre-tax return on revenues was primarily due to higher price realization in all markets. 20 The major factors for the Parts segment changes in net sales and revenues, cost of sales and revenues and gross margin between 2023 and 2022 are as follows: NET SALES AND COST OF SALES AND GROSS ( $ in millions ) REVENUES REVENUES MARGIN 2022 $ 5,764.3 $ 4,009.6 $ 1,754.7 Increase (decrease) Aftermarket parts volume 22.5 9.2 13.3 Average aftermarket parts sales prices 614.2 614.2 Average aftermarket parts direct costs 297.6 (297.6 ) Warehouse and other indirect costs 44.8 (44.8 ) Currency translation 13.4 8.4 5.0 Total increase 650.1 360.0 290.1 2023 $ 6,414.4 $ 4,369.6 $ 2,044.8 • Aftermarket parts sales volume increased by $22.5 million and related cost of sales increased by $9.2 million primarily reflecting higher sales volume in Brasil, Australia and Europe, partially offset by lower sales volume in the U.S. • Average aftermarket parts sales prices increased sales by $614.2 million primarily due to higher price realization in North America and Europe. • Average aftermarket parts direct costs increased $297.6 million due to higher material costs, primarily in the U.S. and Europe. • Warehouse and other indirect costs increased $44.8 million primarily due to higher salaries and related expenses and costs of supplies. • The currency translation effect on sales and cost of sales primarily reflects an increase in the value of the euro relative to the U.S. dollar, partially offset by a decrease in the value of the Australian dollar and the Canadian dollar relative to the U.S. dollar. • Parts gross margin was 31.9% in 2023 compared to 30.4% in 2022 due to the factors noted above.
The major factors for the Parts segment changes in net sales and revenues, cost of sales and revenues and gross margin between 2024 and 2023 are as follows: NET COST OF SALES AND SALES AND GROSS ($ in millions) REVENUES REVENUES MARGIN 2023 $ 6,414.4 $ 4,369.6 $ 2,044.8 Increase (decrease) Aftermarket parts volume 89.8 81.2 8.6 Average aftermarket parts sales prices 161.6 161.6 Average aftermarket parts direct costs 143.9 (143.9 ) Warehouse and other indirect costs 14.2 (14.2 ) Currency translation .6 (4.5 ) 5.1 Total increase 252.0 234.8 17.2 2024 $ 6,666.4 $ 4,604.4 $ 2,062.0 • Aftermarket parts sales volume increased by $89.8 million and related cost of sales increased by $81.2 million, primarily reflecting higher sales volume in all markets except the U.S. and Canada. • Average aftermarket parts sales prices increased sales by $161.6 million, primarily due to price realization in Europe and the U.S. and Canada. • Average aftermarket parts direct costs increased $143.9 million due to higher material costs, primarily in the U.S. and Europe, and higher delivery costs. • Warehouse and other indirect costs increased $14.2 million primarily due to higher salaries and related expenses. • The currency translation effect on sales and cost of sales primarily reflects a decrease in the value of the Brazilian real, Canadian dollar and Australian dollar relative to the U.S. dollar, partially offset by an increase in the value of the euro relative to the U.S. dollar. • Parts gross margin was 30.9% in 2024 compared to 31.9% in 2023 due to the factors noted above.
The increase in cost of sales was primarily due to higher costs from extended warranty and service contracts. • The currency translation effect on sales and cost of sales reflects an increase in the value of the euro and Brazilian real relative to the U.S. dollar, partially offset by the decrease in the value of the Canadian dollar and Australian dollar relative to the U.S. dollar. • Truck gross margin was 16.4% in 2023 compared to 10.6% in 2022 due to the factors noted above.
The increase in cost of sales by $106.3 million reflects higher costs from extended warranty, R&M contracts, dealer support services and lower used truck results. • The currency translation effect on sales and cost of sales primarily reflects a decline in the value of the Brazilian real, Canadian dollar, Mexican peso and Australian dollar relative to the U.S. dollar, partially offset by the increase in value of the euro relative to the U.S. dollar. • Truck gross margin was 13.9% in 2024 compared to 16.4% in 2023 due to the factors noted above.
The Company’s other commitments include the following at December 31, 2023: COMMITMENT EXPIRATION ( $ in millions ) WITHIN 1 YEAR 1-3 YEARS 3-5 YEARS MORE THAN 5 YEARS TOTAL Loan and lease commitments $ 940.7 $ 940.7 Residual value guarantees 414.2 $ 385.6 $ 52.8 $ 11.1 863.7 Letters of credit 22.7 1.0 23.7 $ 1,377.6 $ 385.6 $ 52.8 $ 12.1 $ 1,828.1 Loan and lease commitments are for funding new retail loan and lease contracts.
The Company’s other commitments include the following at December 31, 2024: COMMITMENT EXPIRATION ($ in millions) WITHIN 1 YEAR 1-3 YEARS 3-5 YEARS MORE THAN 5 YEARS TOTAL Loan and lease commitments $ 949.3 $ 949.3 Residual value guarantees 306.6 $ 237.9 $ 74.9 $ 12.8 632.2 Letters of credit 10.5 .2 13.0 23.7 $ 1,266.4 $ 237.9 $ 75.1 $ 25.8 $ 1,605.2 Loan and lease commitments are for funding new retail loan and lease contracts.
The total amount of medium-term notes outstanding for PFL Canada as of December 31, 2023 was 150.0 million Canadian dollars. The Company’s Brazilian subsidiary, Banco PACCAR S.A., established a lending program in December 2021 with the local development bank, Banco Nacional de Desenvolvimento Economico e Social (BNDES) for qualified customers to receive preferential conditions and generally market interest rates.
There were no borrowings under this program as of December 31, 2024. The Company’s Brazilian subsidiary, Banco PACCAR S.A., established a lending program in December 2021 with the local development bank, Banco Nacional de Desenvolvimento Economico e Social (BNDES), for qualified customers to receive preferential conditions and generally market interest rates.
The increase in new loan and finance lease volume reflected higher retail sales of PACCAR trucks and a higher amount financed per truck in all major markets. The decrease in equipment on operating leases new business volume reflected lower market demand, partially offset by a higher amount financed per truck in all major markets.
The increase in new loan and finance lease volume reflected higher finance market share of new PACCAR truck sales, primarily in the U.S. and Canada and Brasil. The increase in equipment on operating lease volume reflected higher market demand and a higher amount financed per truck in all major markets.
( $ in millions ) Year Ended December 31, 2023 2022 Domestic income before taxes $ 3,913.7 $ 2,322.9 Foreign income before taxes 1,804.5 1,525.8 Total income before taxes $ 5,718.2 $ 3,848.7 Domestic pre-tax return on revenues 20.4 % 14.7 % Foreign pre-tax return on revenues 11.3 % 11.7 % Total pre-tax return on revenues 16.3 % 13.4 % In 2023, both domestic and foreign income before income taxes and domestic pre-tax return on revenues increased primarily due to the improved results from Truck and Parts operations.
($ in millions) Year Ended December 31, 2024 2023 Domestic income before taxes $ 3,525.1 $ 3,913.7 Foreign income before taxes 1,875.8 1,804.5 Total income before taxes $ 5,400.9 $ 5,718.2 Domestic pre-tax return on revenues 18.5 % 20.4 % Foreign pre-tax return on revenues 12.8 % 11.3 % Total pre-tax return on revenues 16.0 % 16.3 % 27 In 2024, domestic income before income taxes and domestic pre-tax return on revenues decreased primarily due to lower Truck operation results.
During 2023, market values on equipment returning upon operating lease maturity were generally higher than the residual values on the equipment, resulting in a decrease in depreciation expense of $63.8 million.
During 2024, market values on equipment returning upon operating lease maturity were generally lower than the residual values on the equipment, resulting in an increase in depreciation expense of $22.7 million.
The major factors for the changes in interest and fees, interest and other borrowing expenses and finance margin between 2023 and 2022 are outlined below: ( $ in millions ) INTEREST AND FEES INTEREST AND OTHER BORROWING EXPENSES FINANCE MARGIN 2022 $ 628.7 $ 216.3 $ 412.4 Increase (decrease) Average finance receivables 183.6 183.6 Average debt balances 76.1 (76.1 ) Yields 177.7 177.7 Borrowing rates 200.2 (200.2 ) Currency translation and other 19.3 8.0 11.3 Total increase 380.6 284.3 96.3 2023 $ 1,009.3 $ 500.6 $ 508.7 • Average finance receivables increased $2.77 billion (excluding foreign exchange effects) in 2023 primarily due to higher average loan, finance lease and dealer wholesale balances. • Average debt balances increased $1.91 billion (excluding foreign exchange effects) in 2023, reflecting higher funding requirements for the portfolio, which includes loans, finance leases, dealer wholesale and equipment on operating lease. • Higher portfolio yields (6.7% in 2023 compared to 5.1% in 2022) increased interest and fees by $177.7 million.
The major factors for the changes in interest and fees, interest and other borrowing expenses and finance margin between 2024 and 2023 are outlined below: ($ in millions) INTEREST AND FEES INTEREST AND OTHER BORROWING EXPENSES FINANCE MARGIN 2023 $ 1,009.3 $ 500.6 $ 508.7 Increase (decrease) Average finance receivables 208.9 208.9 Average debt balances 107.9 (107.9 ) Yields 96.7 96.7 Borrowing rates 113.1 (113.1 ) Currency translation and other (19.0 ) (10.8 ) (8.2 ) Total increase 286.6 210.2 76.4 2024 $ 1,295.9 $ 710.8 $ 585.1 • Average finance receivables increased $2.84 billion (excluding foreign exchange effects), increasing interest and fees by $208.9 million in 2024, primarily due to higher average loan, finance lease and dealer wholesale balances in the U.S. and Canada, Mexico and Brasil. • Average debt balances increased $2.25 billion (excluding foreign exchange effects), increasing interest and other borrowing costs by $107.9 million in 2024, reflecting higher funding requirements for portfolio growth in loans, finance leases and dealer wholesale receivables. • Higher portfolio yields (7.3% in 2024 compared to 6.7% in 2023) increased interest and fees by $96.7 million.
If current freight transportation conditions decline due to weaker economic conditions, then past due accounts, truck repossessions and credit losses would likely increase from the current low levels and new business volume would likely decline.
The used truck market has normalized in North America, but remains soft in Europe. If freight transportation conditions decline due to a weaker economy, then past due accounts, truck repossessions and credit losses would likely increase from the current levels and new business volume would likely decline.
There were no repurchases made under this plan during the year ended December 31, 2023. Truck, Parts and Other The Company provides funding for working capital, capital expenditures, R&D, dividends, stock repurchases and other business initiatives and commitments primarily from cash provided by operations. Management expects this method of funding to continue in the future.
Truck, Parts and Other The Company provides funding for working capital, capital expenditures, R&D, dividends, stock repurchases and other business initiatives and commitments primarily from cash provided by operations. Management expects this method of funding to continue in the future. Investments for manufacturing property, plant and equipment in 2024 were $787.3 million compared to $679.4 million in 2023.
When considering whether to modify customer accounts for credit reasons, the Company evaluates the creditworthiness of the customers and modifies those accounts that the Company considers likely to perform under the modified terms. 24 The post-modification balances of accounts modified during the years ended December 31, 2023 and 2022 are summarized below: 2023 2022 ( $ in millions ) AMORTIZED COST BASIS % OF TOTAL PORTFOLIO* AMORTIZED COST BASIS % OF TOTAL PORTFOLIO* Commercial $ 200.1 1.5 % $ 225.4 2.0 % Insignificant delay 232.5 1.7 % 79.3 .7 % Credit 55.2 .4 % 59.8 .5 % $ 487.8 3.6 % $ 364.5 3.2 % * Amortized cost basis immediately after modification as a percentage of the year-end retail portfolio balance.
The post-modification balances of accounts modified during the years ended December 31, 2024 and 2023 are summarized below: 2024 2023 ($ in millions) AMORTIZED COST BASIS % OF TOTAL PORTFOLIO* AMORTIZED COST BASIS % OF TOTAL PORTFOLIO* Commercial $ 441.3 3.1 % $ 200.1 1.5 % Insignificant delay 223.0 1.5 % 232.5 1.7 % Credit 330.2 2.3 % 55.2 .4 % $ 994.5 6.9 % $ 487.8 3.6 % * Amortized cost basis immediately after modification as a percentage of the year-end retail portfolio balance.
The Company’s medium-duty market share was 14.5% in 2023 compared to 10.9% in 2022. The over 16‑tonne truck market in Europe in 2023 increased to 343,300 units from 297,500 units in 2022, and DAF’s market share was 15.6% in 2023 compared to 17.3% in 2022. The 6 to 16‑tonne market was 46,800 units in 2023 and 38,800 units in 2022.
The Company’s medium-duty market share was 18.0% in 2024 compared to 14.5% in 2023. The over 16‑tonne truck market in Europe in 2024 decreased to 316,100 units from 343,300 units in 2023, and DAF’s market share was 14.4% in 2024 compared to 15.6% in 2023. The 6 to 16‑tonne market was 50,900 units in 2024 and 46,800 units in 2023.
The Company’s worldwide truck net sales and revenues are summarized below: ( $ in millions ) Year Ended December 31, 2023 2022 % CHANGE Truck net sales and revenues: U.S. and Canada $ 15,898.5 $ 12,521.8 27 Europe 6,871.3 5,866.5 17 Mexico, South America, Australia and other 4,076.6 3,097.9 32 $ 26,846.4 $ 21,486.2 25 Truck income before income taxes $ 3,799.9 $ 1,753.3 117 Pre-tax return on revenues 14.2 % 8.2 % The Company’s worldwide truck net sales and revenues increased to $26.85 billion in 2023 from $21.49 billion in 2022 primarily due to higher truck unit deliveries, improved price realization in all markets and favorable currency translation effects, primarily the euro.
The Company’s worldwide truck net sales and revenues are summarized below: ($ in millions) Year Ended December 31, 2024 2023 % CHANGE Truck net sales and revenues: U.S. and Canada $ 15,386.1 $ 15,898.5 (3 ) Europe 4,998.2 6,871.3 (27 ) Mexico, South America, Australia and other 4,454.1 4,076.6 9 $ 24,838.4 $ 26,846.4 (7 ) Truck income before income taxes $ 2,852.6 $ 3,799.9 (25 ) Pre-tax return on revenues 11.5 % 14.2 % The Company’s worldwide truck net sales and revenues decreased to $24.84 billion in 2024 from $26.85 billion in 2023 primarily due to lower truck deliveries in Europe.
Investments for manufacturing property, plant and equipment in 2023 were $679.4 million compared to $491.2 million in 2022. Over the past decade, the Company’s combined investments in worldwide capital projects and R&D totaled $7.68 billion and have significantly increased the operating capacity and efficiency of its facilities and enhanced the quality and operating efficiency of the Company’s premium products.
Over the past decade, the Company’s combined investments in worldwide capital projects and R&D totaled $8.48 billion and have significantly increased the operating capacity and efficiency of its facilities and enhanced the quality and operating efficiency of the Company’s premium products.
Had these accounts not been modified and continued to not make payments, the pro forma percentage of retail loan and lease accounts 30+ days past due would have been as follows: At December 31, 2023 2022 Pro forma percentage of retail loan and lease accounts 30+ days past due: U.S. and Canada .8 % .1 % Europe 1.8 % .2 % Mexico, Australia, Brasil and other 2.0 % 2.0 % Worldwide 1.2 % .5 % Modifications of accounts in prior quarters that were more than 30 days past due at the time of modification are included in past dues if they were not performing under the modified terms at December 31, 2023 and 2022.
Had these accounts not been modified and continued to not make payments, the pro forma percentage of retail loan and lease accounts 30+ days past due would have been as follows: At December 31, 2024 2023 Pro forma percentage of retail loan and lease accounts 30+ days past due: U.S. and Canada 1.4 % .8 % Europe .8 % 1.8 % Mexico, Australia, Brasil and other 2.6 % 2.0 % Worldwide 1.6 % 1.2 % The Company typically requires customers to pay current before granting modifications.
The Company believes its various sources of liquidity, including committed bank facilities, would continue to provide it with sufficient funding resources to service its maturing debt obligations. 28 Commitments The following summarizes the Company’s contractual cash commitments at December 31, 2023: MATURITY ( $ in millions ) WITHIN 1 YEAR 1-3 YEARS 3-5 YEARS MORE THAN 5 YEARS TOTAL Borrowings* $ 7,448.5 $ 5,851.7 $ 988.4 $ 14,288.6 Interest on debt** 282.7 331.0 41.7 655.4 Purchase obligations 104.0 179.4 139.2 $ 115.7 538.3 Lease liabilities 18.8 31.1 18.4 14.6 82.9 Other obligations 94.0 7.7 1.3 4.3 107.3 $ 7,948.0 $ 6,400.9 $ 1,189.0 $ 134.6 $ 15,672.5 * Commercial paper included in borrowings is at par value. ** Interest on floating-rate debt is based on the applicable market rates at December 31, 2023.
The Company believes its various sources of liquidity, including committed bank facilities, would continue to provide it with sufficient funding resources to service its maturing debt obligations. 30 Commitments The following summarizes the Company’s contractual cash commitments at December 31, 2024: MATURITY ($ in millions) WITHIN 1 YEAR 1-3 YEARS 3-5 YEARS MORE THAN 5 YEARS TOTAL Borrowings* $ 8,359.6 $ 5,589.7 $ 1,647.4 $ 350.0 $ 15,946.7 Interest on debt** 408.8 440.8 108.3 73.9 1,031.8 Purchase obligations 128.0 184.3 138.3 90.6 541.2 Lease liabilities 21.0 32.9 14.7 13.0 81.6 Other obligations 81.9 5.8 .5 6.2 94.4 $ 8,999.3 $ 6,253.5 $ 1,909.2 $ 533.7 $ 17,695.7 * Commercial paper included in borrowings is at par value. ** Interest on floating-rate debt is based on the applicable market rates at December 31, 2024.
The Company’s annualized pre-tax return on average total assets for Financial Services was 2.9% in 2023 compared to 3.7% in 2022, respectively. 25 Other Other includes the winch business as well as sales, income and expenses not attributable to a reportable segment. Other also includes non-service cost components of pension expense and a portion of corporate expense.
The Company’s annualized pre-tax return on average total assets for Financial Services was 2.0% in 2024 compared to 2.9% in 2023, respectively. Other Included in Other is the Company’s industrial winch manufacturing business through October 31, 2024, as well as sales, income and expenses not attributable to a reportable segment.
The Company’s Other business includes the manufacturing and marketing of industrial winches. 2023 Financial Highlights • Worldwide net sales and revenues were $35.13 billion in 2023 compared to $28.82 billion in 2022, primarily due to higher truck and parts revenues. • Truck sales were $26.85 billion in 2023 compared to $21.49 billion in 2022, primarily due to higher truck deliveries and price realization in all markets. • Parts sales were $6.41 billion in 2023 compared to $5.76 billion in 2022 reflecting higher price realization in all markets. • Financial Services revenues were $1.81 billion in 2023 compared to $1.51 billion in 2022, primarily due to portfolio growth and higher portfolio yields. • In 2023, PACCAR earned net income for the 85 th consecutive year.
The Company’s Other business included the manufacturing and marketing of industrial winches through October 31, 2024, when PACCAR sold its industrial winch business. 2024 Financial Highlights • Worldwide net sales and revenues were $33.66 billion in 2024 compared to $35.13 billion in 2023, primarily due to lower truck revenues, partially offset by higher parts and financial services revenues. • Truck sales were $24.84 billion in 2024 compared to $26.85 billion in 2023 from lower revenues in Europe and the U.S. and Canada. • Parts sales were $6.67 billion in 2024 compared to $6.41 billion in 2023, reflecting higher price realization in all markets. • Financial Services revenues were $2.10 billion in 2024 compared to $1.81 billion in 2023, primarily due to portfolio growth and higher portfolio yields. • In 2024, PACCAR earned net income for the 86 th consecutive year.
Truck selling, general and administrative expenses (SG&A) in 2023 decreased to $278.5 million from $280.0 million in 2022. The decrease was primarily due to lower professional expenses, and lower sales and marketing expenses, offset by higher salaries and travel related costs. As a percentage of sales, Truck SG&A was 1.0% in 2023 and 1.3% in 2022.
Truck selling, general and administrative (SG&A) expenses in 2024 decreased to $254.2 million from $278.5 million in 2023. The decrease was primarily due to lower sales and marketing expenses and professional expenses.
Financing activities: Cash provided by financing activities was $1.10 billion in 2023 compared to $304.9 million in 2022. The Company paid $1.52 billion in dividends in 2023 compared to $1.00 billion in 2022, primarily due to a higher year-end dividend paid in January 2023.
The Company paid $2.29 billion in dividends in 2024 compared to $1.52 billion in 2023, primarily due to a higher year-end dividend paid in January 2024.
The Company recognized gains on used trucks, excluding repossessions, of $43.5 million in 2023 compared to $140.1 million in 2022, including losses on multiple unit transactions of $12.3 million in 2023 compared to $.8 million in 2022. Used truck losses related to repossessions, which are recognized as credit losses, in 2023 were $4.6 million and were insignificant in 2022.
The Company recognized losses on used trucks, excluding repossessions, of $59.0 million in 2024 compared to gains of $43.5 million in 2023, including $40.3 million of losses on multiple unit transactions in 2024 compared to $12.3 million in 2023.
In 2023, foreign income before income taxes and pre-tax return on revenues includes a one-time expense for the EC-related charge of $600.0 million in the first quarter 2023.
In 2024, foreign income before income taxes increased, as 2023 included the EC-related charge of $600.0 million, which also reduced foreign pre-tax return on revenues.
The l ower effective tax rate in 2023 was primarily due to a $119.7 million discrete tax benefit for the release of a valuation allowance on deferred tax assets in Brasil, and the change in mix of income generated in jurisdictions with lower tax rates in 2023 as compared to 2022.
The lower effective tax rate in 2023 was primarily due to a $119.7 million discrete tax benefit for the release of a valuation allowance on deferred tax assets in Brasil. Also included in 2023 was the EC-related charge of $600.0 million, which lowered the effective tax rate in 2023.
The Company intends to extend or replace these credit facilities on or before expiration to maintain facilities of similar amounts and duration. These credit facilities are maintained primarily to provide backup liquidity for commercial paper borrowings and maturing medium-term notes. There were no borrowings under the committed bank facilities for the year ended December 31, 2023.
These credit facilities are maintained primarily to provide backup liquidity for commercial paper borrowings and maturing medium-term notes. There were no borrowings under the committed bank facilities for the year ended December 31, 2024. On December 4, 2018, PACCAR’s Board of Directors approved the repurchase of up to $500.0 million of the Company’s outstanding common stock without an expiration.
( $ in millions ) Year Ended December 31, 2023 2022 % CHANGE New loan and lease volume: U.S. and Canada $ 3,662.3 $ 3,376.5 8 Europe 1,586.6 1,483.4 7 Mexico, Australia, Brasil and other 1,956.4 1,355.8 44 $ 7,205.3 $ 6,215.7 16 New loan and lease volume by product: Loans and finance leases $ 6,538.6 $ 5,209.6 26 Equipment on operating lease 666.7 1,006.1 (34 ) $ 7,205.3 $ 6,215.7 16 New loan and lease unit volume: Loans and finance leases 47,200 42,100 12 Equipment on operating lease 7,200 11,600 (38 ) 54,400 53,700 1 Average earning assets: U.S. and Canada $ 9,478.5 $ 8,647.4 10 Europe 4,465.9 3,810.0 17 Mexico, Australia, Brasil and other 3,596.5 2,544.0 41 $ 17,540.9 $ 15,001.4 17 Average earning assets by product: Loans and finance leases $ 11,903.3 $ 10,279.4 16 Dealer wholesale financing 3,100.2 1,933.9 60 Equipment on lease and other 2,537.4 2,788.1 (9 ) $ 17,540.9 $ 15,001.4 17 Revenues: U.S. and Canada $ 759.7 $ 684.3 11 Europe 555.7 498.3 12 Mexico, Australia, Brasil and other 496.5 322.8 54 $ 1,811.9 $ 1,505.4 20 Revenues by product: Loans and finance leases $ 839.8 $ 532.0 58 Dealer wholesale financing 169.5 96.7 75 Equipment on lease and other 802.6 876.7 (8 ) $ 1,811.9 $ 1,505.4 20 Income before income taxes $ 540.3 $ 588.9 (8 ) New loan and lease volume increased to $7.21 billion in 2023 from $6.22 billion in 2022.
($ in millions) Year Ended December 31, 2024 2023 % CHANGE New loan and lease volume: U.S. and Canada $ 3,961.4 $ 3,662.3 8 Europe 1,325.1 1,586.6 (16 ) Mexico, Australia, Brasil and other 2,213.3 1,956.4 13 $ 7,499.8 $ 7,205.3 4 New loan and lease volume by product: Loans and finance leases $ 6,585.2 $ 6,538.6 1 Equipment on operating lease 914.6 666.7 37 $ 7,499.8 $ 7,205.3 4 New loan and lease unit volume: Loans and finance leases 46,600 47,200 (1 ) Equipment on operating lease 7,750 7,200 8 54,350 54,400 Average earning assets: U.S. and Canada $ 11,196.9 $ 9,478.5 18 Europe 4,182.9 4,465.9 (6 ) Mexico, Australia, Brasil and other 4,514.9 3,596.5 26 $ 19,894.7 $ 17,540.9 13 Average earning assets by product: Loans and finance leases $ 13,735.6 $ 11,903.3 15 Dealer wholesale financing 3,988.2 3,100.2 29 Equipment on lease and other 2,170.9 2,537.4 (14 ) $ 19,894.7 $ 17,540.9 13 Revenues: U.S. and Canada $ 894.2 $ 759.7 18 Europe 577.9 555.7 4 Mexico, Australia, Brasil and other 627.4 496.5 26 $ 2,099.5 $ 1,811.9 16 Revenues by product: Loans and finance leases $ 981.3 $ 766.3 28 Dealer wholesale financing 314.6 243.0 29 Equipment on lease and other 803.6 802.6 $ 2,099.5 $ 1,811.9 16 Income before income taxes $ 435.6 $ 540.3 (19 ) New loan and lease volume increased to a record $7.50 billion in 2024 from $7.21 billion in 2023.
The Company’s new truck deliveries are summarized below: Year Ended December 31, 2023 2022 % CHANGE U.S. and Canada 109,100 95,600 14 Europe 63,200 62,400 1 Mexico, South America, Australia and other 31,900 27,900 14 Total units 204,200 185,900 10 The increase in new truck deliveries worldwide in 2023 compared to 2022 was driven by higher build rates and increased demand in all major markets.
The Company’s new truck deliveries are summarized below: Year Ended December 31, 2024 2023 % CHANGE U.S. and Canada 106,400 109,100 (2 ) Europe 45,400 63,200 (28 ) Mexico, South America, Australia and other 33,500 31,900 5 Total units 185,300 204,200 (9 ) Worldwide new truck deliveries decreased in 2024 compared to 2023, primarily due to lower deliveries in Europe.
Modification activity increased to $487.8 in 2023 from $364.5 in 2022. The decrease in modifications for commercial reasons primarily reflects lower volumes of refinancing. The increase related to Insignificant Delay reflects an increase in customers requesting payment relief for up to three months, primarily in the U.S.
The decrease related to Insignificant delay modifications reflects a decrease in customers requesting payment relief for up to three months, primarily in the U.S., partially offset by an increase in customers requesting payment relief for up to three months in Brasil. The increase in Credit modifications reflects higher volumes of contract modifications in the U.S.
Parts The Company’s Parts segment accounted for 18% of revenues in 2023 compared to 20% in 2022.
As a percentage of sales, Truck SG&A was 1.0% in 2024 and 1.0% in 2023. 21 Parts The Company’s Parts segment accounted for 20% of revenues in 2024 compared to 18% in 2023.
In Europe, the 2024 truck industry registrations for over 16-tonne vehicles are expected to be 260,000 to 300,000 units compared to 343,300 in 2023.
Truck Outlook Truck industry heavy-duty retail sales in the U.S. and Canada in 2025 are expected to be 250,000 to 280,000 units compared to 268,100 in 2024. In Europe, the 2025 truck industry registrations for over 16-tonne vehicles are expected to be 270,000 to 300,000 units compared to 316,100 in 2024.
The Company expects to continue paying dividends, although there is no assurance as to future dividends because they are dependent upon future earnings, capital requirements and financial conditions.
In 2023, an increase in the value of foreign currencies relative to the U.S. dollar, primarily the euro, Mexican peso and Australian dollar, increased cash and cash equivalents by $69.6 million. The Company expects to continue paying dividends, although there is no assurance as to future dividends because they are dependent upon future earnings, capital requirements and financial conditions.
While the timing and amount of the ultimate costs associated with future environmental cleanup cannot be determined, management expects that these matters will not have a significant effect on the Company’s consolidated cash flow, liquidity or financial condition. 29 RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES: This Form 10-K includes “adjusted net income (non-GAAP)” and “adjusted net income per diluted share (non-GAAP)”, which are financial measures that are not in accordance with U.S. generally accepted accounting principles (“GAAP”), since they exclude a charge for EC-related claims.
While the timing and amount of the ultimate costs associated with future environmental cleanup cannot be determined, management expects that these matters will not have a significant effect on the Company’s consolidated cash flow, liquidity or financial condition. 31 CRITICAL ACCOUNTING POLICIES: The Company’s significant accounting policies are disclosed in Note A of the consolidated financial statements.
Cost per asset increased $42.1 million due to higher depreciation and operating expenses. • The currency translation effects reflect an increase in the value of foreign currencies relative to the U.S. dollar, primarily the Mexican peso and euro. Financial Services SG&A expense increased to $149.0 million in 2023 from $133.9 million in 2022.
Cost per asset increased $85.1 million due to higher depreciation and operating expenses, mainly in Europe. Financial Services SG&A expense increased to $159.0 million in 2024 from $149.0 million in 2023. The increase was primarily due to higher salaries and related expenses and higher depreciation.
In South America, heavy-duty truck industry registrations in 2024 are projected to be 105,000 to 115,000 compared to 105,000 in 2023. 17 Parts Outlook In 2024, PACCAR Parts sales are expected to increase 4-8% compared to 2023 levels reflecting strong freight demand.
In South America, heavy-duty truck industry registrations in 2025 are projected to be 115,000 to 125,000 compared to 119,000 in 2024. Parts Outlook In 2025, PACCAR Parts sales are expected to increase 2-4% compared to 2024, depending on the economic conditions. 18 Financial Services Outlook In 2025, average earning assets are expected to be comparable to 2024.
Truck segment income before income taxes and pretax return on revenues reflect the impact of higher truck unit deliveries and improved margins. 19 The major factors for the Truck segment changes in net sales and revenues, cost of sales and revenues and gross margin between 2023 and 2022 are as follows: NET COST OF SALES AND SALES AND GROSS ( $ in millions ) REVENUES REVENUES MARGIN 2022 $ 21,486.2 $ 19,205.4 $ 2,280.8 Increase (decrease) Truck sales volume 2,465.8 1,918.0 547.8 Average truck sales prices 2,785.9 2,785.9 Average per truck material, labor and other direct costs 916.7 (916.7 ) Factory overhead and other indirect costs 204.3 (204.3 ) Extended warranties, operating leases and other 40.5 134.2 (93.7 ) Currency translation 68.0 62.0 6.0 Total increase 5,360.2 3,235.2 2,125.0 2023 $ 26,846.4 $ 22,440.6 $ 4,405.8 • Truck sales volume reflects higher truck deliveries in all major markets. • Average truck sales prices increased sales by $2.79 billion, primarily due to higher price realization worldwide reflecting the positive effect of new truck models as well as inflationary cost increases. • Average cost per truck increased cost of sales by $916.7 million, primarily reflecting higher raw material, labor and product support costs, mainly warranty expense. • Factory overhead and other indirect costs increased $204.3 million, primarily due to higher labor costs, maintenance, depreciation and utilities. • Extended warranties, operating leases and other increased revenues by $40.5 million and increased cost of sales by $134.2 million.
Truck segment income before income taxes and pre-tax return on revenues decreased primarily due to lower truck unit deliveries in Europe and the U.S. and Canada, partially offset by higher truck unit deliveries in Mexico and South America. 20 The major factors for the Truck segment changes in net sales and revenues, cost of sales and revenues and gross margin between 2024 and 2023 are as follows: NET COST OF SALES AND SALES AND GROSS ($ in millions) REVENUES REVENUES MARGIN 2023 $ 26,846.4 $ 22,440.6 $ 4,405.8 (Decrease) increase Truck sales volume (2,107.6 ) (1,650.0 ) (457.6 ) Average truck sales prices 155.6 155.6 Average material, labor and other direct costs 557.1 (557.1 ) Factory overhead and other indirect costs 18.6 (18.6 ) Extended warranties, operating leases and other 61.5 106.3 (44.8 ) Currency translation (117.5 ) (82.8 ) (34.7 ) Total decrease (2,008.0 ) (1,050.8 ) (957.2 ) 2024 $ 24,838.4 $ 21,389.8 $ 3,448.6 • Truck sales volume decreased revenues by $2,107.6 million and costs by $1,650.0 million, primarily reflecting lower truck deliveries in Europe and the U.S. and Canada, partially offset by higher truck deliveries in Mexico and Brasil. • Average truck sales prices increased sales by $155.6 million from modest price realization, primarily in the U.S. and Canada, Mexico and Australia. • Average cost per truck increased cost of sales by $557.1 million, primarily reflecting higher raw material and labor costs, partially offset by lower warranty costs. • Factory overhead and other indirect costs increased $18.6 million, primarily due to higher labor costs, primarily offset by lower utilities costs and factory supplies. • Extended warranties, operating leases and other increased revenues by $61.5 million primarily due to higher volume of repair and maintenance (R&M) contracts, extended warranty and dealer support services.
Cash dividends declared for the last two years were as follows: QUARTER 2023 2022 First $ .25 $ .23 Second .25 .23 Third .27 .23 Fourth .27 .25 Year-End Extra (paid in January of the following year) 3.20 1.87 Total dividends declared per share* $ 4.24 $ 2.80 * The sum of quarterly per share amounts do not equal per share amounts reported for the full year due to rounding.
Cash dividends declared for the last two years were as follows: QUARTER 2024 2023 First $ .27 $ .25 Second .30 .25 Third .30 .27 Fourth .30 .27 Year-End Extra (paid in January of the following year) 3.00 3.20 Total dividends declared per share $ 4.17 $ 4.24 Credit Lines and Other: The Company has line of credit arrangements of $5.48 billion, of which $4.96 billion were unused at December 31, 2024.
On December 4, 2018, PACCAR’s Board of Directors approved the repurchase of up to $500.0 million of the Company’s outstanding common stock without an expiration. The objective of the repurchase plan is to return value to PACCAR shareholders. As of December 31, 2023, the Company has repurchased $110.0 million of shares under this plan.
The objective of the repurchase plan is to return value to PACCAR shareholders. As of December 31, 2024, the Company has repurchased $110.0 million of shares under this plan. There were no repurchases made under this plan during the year ended December 31, 2024.
Other sales represent less than 1% of consolidated net sales and revenues for 2023 and 2022. Other SG&A decreased to $87.8 million in 2023 from $96.1 million in 2022 primarily due to lower corporate expenses. Other loss before tax was $616.8 million in 2023 compared to $1.1 million in 2022.
Other also includes non-service cost components of pension expense and a portion of corporate expense. Other sales represent less than 1% of consolidated net sales and revenues for 2024 and 2023. Other SG&A decreased to $84.4 million in 2024 from $87.8 million in 2023, primarily due to a decrease in professional fees partially offset by higher salaries and related expenses.
The increase was primarily due to higher interest and fee income driven by portfolio growth and higher portfolio yields. The effects of currency translation increased PFS revenues by $40.8 million in 2023, primarily due to a stronger Mexican peso and euro relative to the U.S. dollar.
The effects of currency translation decreased PFS revenues by $23.5 million in 2024, primarily due to a decrease in the value of foreign currencies relative to the U.S. dollar, primarily the Brazilian real and Mexican peso.
The effect of currency translation increased PFS income before income taxes by $15.0 million in 2023, primarily due to a stronger Mexican peso and euro relative to the U.S. dollar. 22 Included in Financial Services “Other Assets” on the Company’s Consolidated Balance Sheets are used trucks held for sale, net of impairments, of $309.8 million at December 31, 2023 and $141.7 million at December 31, 2022.
Included in Financial Services, Other assets on the Company’s Consolidated Balance Sheets are used trucks held for sale, net of impairments, of $396.5 million at December 31, 2024 and $309.8 million at December 31, 2023.
The increase was primarily due to the EC-related charge in the first quarter 2023 which is discussed in Note L of the consolidated financial statements. Investment income increased to $292.2 million in 2023 from $61.0 million in 2022, primarily due to higher market interest rates in all regions, as well as higher investment balances.
Other income before tax was $13.5 million in 2024 compared to a loss of $616.8 million in 2023, primarily due to the EC-related charge in the first quarter 2023 which is discussed in Note L of the consolidated financial statements.
The effect of currency translation increased new loan and lease volume by $98.7 million, primarily due to the stronger Mexican peso and euro relative to the U.S. dollar. PFS finance market share of new PACCAR truck sales was 24.0% in 2023 compared to 25.6% in 2022. PFS revenues increased to $1.81 billion in 2023 from $1.51 billion in 2022.
PFS finance market share of new PACCAR truck sales was 25.0% in 2024 compared to 24.0% in 2023. 23 PFS revenues increased to $2.10 billion in 2024 from $1.81 billion in 2023. The increase was primarily driven by portfolio growth in all markets except Europe.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−1 removed3 unchanged
Biggest changeBased on the Company’s sensitivity analysis, the potential loss in fair value for such financial instruments from a 10% unfavorable change in quoted commodity prices would be a loss of $3.3 related to contracts outstanding at December 31, 2023, compared to a loss of $2.5 at December 31, 2022.
Biggest changeBased on the Company’s sensitivity analysis, the potential loss in fair value for such financial instruments from a 10% unfavorable change in quoted commodity prices would be nil related to contracts outstanding at December 31, 2024, compared to a loss of $3.3 at December 31, 2023. The Company had no commodity contracts at December 31, 2024. , 34
The Company measures its interest-rate risk by estimating the amount by which the fair value of interest-rate sensitive assets and liabilities, including derivative financial instruments, would change assuming an immediate 100 basis point increase across the yield curve as shown in the following table: Fair Value (Losses) Gains 2023 2022 CONSOLIDATED: Assets Cash equivalents and marketable debt securities $ (29.2 ) $ (26.7 ) FINANCIAL SERVICES: Assets Fixed rate loans (146.5 ) (117.4 ) Liabilities Fixed rate term debt 156.8 136.6 Interest-rate swaps 1.2 6.4 Total $ (17.7 ) $ (1.1 ) Currency Risks - The Company enters into foreign currency exchange contracts to hedge its exposure to exchange rate fluctuations of foreign currencies, particularly the Canadian dollar, the euro, the British pound, the Australian dollar, the Brazilian real and the Mexican peso (see Note P for additional information concerning these hedges) .
The Company measures its interest-rate risk by estimating the amount by which the fair value of interest-rate sensitive assets and liabilities, including derivative financial instruments, would change assuming an immediate 100 basis point increase across the yield curve as shown in the following table: Fair Value (Losses) Gains 2024 2023 CONSOLIDATED: Assets Cash equivalents and marketable debt securities $ (49.6 ) $ (29.2 ) FINANCIAL SERVICES: Assets Fixed rate loans (157.7 ) (146.5 ) Interest-rate swaps (35.1 ) Liabilities Fixed rate term debt 198.9 156.8 Interest-rate swaps 1.2 Total $ (43.5 ) $ (17.7 ) Currency Risks - The Company enters into foreign currency exchange contracts to hedge its exposure to exchange rate fluctuations of foreign currencies, particularly the Canadian dollar, the euro, the British pound, the Australian dollar, the Brazilian real and the Mexican peso (see Note P for additional information concerning these hedges) .
Based on the Company’s sensitivity analysis, the potential loss in fair value for such financial instruments from a 10% unfavorable change in quoted foreign currency exchange rates would be a loss of $259.7 related to contracts outstanding at December 31, 2023, compared to a loss of $216.6 at December 31, 2022.
Based on the Company’s sensitivity analysis, the potential loss in fair value for such financial instruments from a 10% unfavorable change in quoted foreign currency exchange rates would be a loss of $126.3 related to contracts outstanding at December 31, 2024, compared to a loss of $259.7 at December 31, 2023.
Removed
These amounts would be largely offset by changes in the values of the underlying hedged exposures. , 33

Other PCAR 10-K year-over-year comparisons